Generally recruitment companies offer decent insight into the health of the economy as companies look to hire when times are good.
So the reinstatement of the first half dividend at PageGroup and a big recovery in revenue and profit reinforces the idea there was a material global rebound in the first six months of 2021.
“The bad news is PageGroup isn’t sounding quite as upbeat about the remainder of the year as the emergence of new Covid variants sees restrictions remain in place in several of its markets,” says AJ Bell financial analyst Danni Hewson.
“It is also possible to note a degree of uncertainty about whether recent growth is a short-term effect driven by pent up demand or something more sustainable.
“And there may have been an element of ‘after the Lord Mayor’s Show’ about these results given the company had already flagged the improved trading back in July. Notably profit and revenue is still below levels seen before the pandemic in 2019.
“Another issue facing the staffing companies is a shortage of available candidates to fill vacancies across a range of industries from hospitality to logistics. While this should drive up fees and commissions in the short term it could hit their growth prospects in the longer term.”