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There will be more job growth in the manufacturing and service sectors in January 2007 than in January 2006, according to the findings of a collaborative report from the Alexandria, Va.-based Society for Human Resource Management and the Rutgers University School of Management and Labor Relations, released Dec. 26.

Firms continue to face considerable difficulty in finding highly qualified applicants to fill key positions, despite the major decline in overall job vacancies, according to the report.

Recruiting is a particular concern within both manufacturing and service sectors, due to a drop in qualified job-seekers, with recruiting difficulty indexes of 19.5 and 22.3 percent respectively.

Though employment expectations among manufacturing firms declined between December 2006 and January 2007, January 2007’s index remains substantially above its January 2006 level, up by nearly 7 percentage points.

Fewer manufacturers said that they planned to shrink their workforces in January 2007 versus January 2006, with more than a 5 percent drop. However, the new-hire compensation index for December 2006 is 1.5 percent lower than that of December 2005.

Within the service sector, the January 2007 index is essentially unchanged from December 2006 but well above the level of January 2006. Service-sector employment is expected to increase in January 2007.

Like manufacturing, the new-hire compensation index for December 2006 is also below the level of December 2005 (10.7 compared with 12.3 percent). The overall number of job vacancies is declining. The recruiting difficulty index climbed from 16.9 in December 2005 to 22.3 in December 2006.

Using data from the BLS (Bureau of Labor Statistics) releases, this report found no evidence of increasing wage inflation.

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