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  • Writer's pictureJeff Matthews

“Feels Like a Normal Recovery to Us”

So, how’s Europe really doing?

That was the question—sometimes the only question—at a Midwest investor conference this week.

And since the troubles in Greece, and in Spain, and in Hungary seem to have triggered the flip from near-euphoria among investors three short months ago to almost complete despair, it’s no wonder that’s what everybody wanted to ask about.

So, how is Europe really doing?

Not bad, actually.

As the CFO of a large dental supply company said, “Spain already had a 20% unemployment rate last year, and that hurt us.” This year, he said, his business in Spain was higher.

A global manufacturer of basic electronics components said more or less the same thing: there’s no noticeable slowdown in European orders, and continued strong growth in Asia.

Robert Half, which provides temporary and permanent staffing, likewise said they’ve seen no noticeable impact in their biggest European markets, which include France, Belgium and Germany, despite repeated attempts to get them to admit that something, somewhere, was going kablooey.

The most significant observations, however, came from Manpower, another publicly traded staffing giant.

Based in Milwaukee, Manpower actually does most of its business in Europe—revenues in France alone are almost triple the US. So investors at the breakout session were, naturally, pretty nervous about what the company is seeing over there.

And what they’re seeing is no big change.

“If you talk to companies in Europe,” the Manpower guy said, “they’re feeling pretty good.” Then, echoing the dental company’s comments, he added, “These are issues that have been there…and at least they’re starting to deal with them.”

Okay, you might be wondering, but what about the United States?Well, for all the worries about a “double-dip” here, business seems to be humming along too.

Not screaming, but humming.

The aforementioned Robert Half pointed out that the temporary help market has been on fire, with 300,000 people placed in the first six months of the recovery. “And that slope is steeper than it’s ever been….The best on record.”

That’s right: “the best on record.”

When, exactly, do those “temps” become “perms”? That’s a question the Robert Half guys could not answer, but for now, the pace of the business recovery seems no different than most recoveries.

Indeed, one large home furnishings retailer we visited at the conference on the same day Best Buy upset Wall Street’s Finest with news that their customers seem to be consuming less—and why shouldn’t they be, since half the stuff Best Buy sells can be downloaded directly to your iPad, while the iPad itself makes Best Buy’s computer department obsolete?—has seen no change at all in their customers’ buying habits.

And we heard the same from restaurant chains, a cruise line and, most interestingly of all, every transportation company in the house.

As one such CEO said, “In March and April the recovery continued, and in May and June we’ve seen the normal seasonal build from there.” Asked about the economy as a whole—and this is a guy whose trucks move product all around the United States—he summed it up this way:

“Feels like a normal recovery to us.”

Jeff Matthews I Am Not Making This Up

© 2010 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews, who also acts as an advisor: clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

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