Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Leading Staffing Company Talent2 issues profits warning

In Monday's trading in Australia, Talent2 shares plunged 55% after the Company warned that its H1 2012 (to Dec 31 2011) results would be about 50% below prior year blaming a slowing hiring market in Australia and Asia.  This is a major negative indicator for the first half of 2012 for corporate profits generally.  T2 is a global company operating in 31 countries and is the first staffing company to acknowledge a global slowdown in revenues and fall in profits.

Staffing firms are leading indicators, and investors should watch results closely for indications of the general economic outlook in H1 2012.  The Australian economy has been of the bright spots in the global universe through the recession, but has shown signs of slowing in recent quarters.  In part, this is an indication of slowing demand from China, its major trading partner.

Michael Page, one of the global benchmarks, will report on its Q4 sales on January 11.  While it is a UK headquartered company, a majority of its operations are form outside the UK.  It is primarily a permanent recruiter.  Also in January, investors should watch for reports from RECN (Jan 2) and Robert Walters (Jan 6).  RECN is primarily a provider of project solutions and RW is a provider of both contract and permanent recruitment. 

These results will give insights into the outlook of their clients.  Simply put, clients are less likely to be outsourcing projects, or to be hiring new staff is their outlook for the immediate future is not optimistic.