Monday, August 4, 2008

State of the Economy

Normally, I don’t write much about the economy in general. But, recently, Larry was forwarded a link to the ADP National Employment Report®. We read the report and came away with a few observations.

While there wasn’t any specific information concerning the pharmaceutical industry, we noticed a couple of things that may be of potential impact. First, US employment declined by 65,000 positions in the month of July in the goods-producing sector where we figure the pharmaceutical industry is located. Certainly there have been numerous reports of continuing layoffs, restructurings and consolidations within the industry we follow which may reflect the macroeconomics cited in this study. The report goes on to say that the sectors hardest hit were those affected by recent difficulties experienced by the mortgage markets. (Do I have a knack for understatement or what?) So, even allowing for the mortgage mess, large employer payrolls still seem to struggling. Second, employment in small businesses defined as those with under fifty (50) employees actually increased by 50,000 during the same period, July.

Here’s what Larry and I came away with. We suspect that outsourcing and offshoring are continuing to eat away at jobs in the types of large companies defined by this study. Next, the growth in small businesses could be a resurgence in the type of small start-up’s which has fueled the start of growth in sectors as varied as technology and biotech in the past. Admittedly, Larry and I are going on a limb here but since we have over a half century of business experience between us, we don’t think that we’re too far off the mark. We hope to interview one of the economic advisers behind this study and test our ideas. Please keep an eye out for future updates on this blog.

The study itself can be found at

As always, we welcome your feedback. Please contact us at We look forward to hearing from you.

Contributed by Guy de Lastin

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