US SPOTLIGHT
U$ ON I
THE RISE
The falls in US GDP seen earlier this year have been reversed, and a raft of indicators show that the economic recovery continues to gain momentum. The relocation picture suggests that the US is on the move at home and forging into overseas markets. All change is the new reality, and the US relocation industry is shaping up to the future, as Fiona Murchie reports.
n late August, at the end of a week dominated by reports of China’s economic woes, came the revelation by the Commerce Department in Washington that US GDP growth had
increased by an annualised rate of 3.7 per cent in the second quarter – far ahead of expectations – bucking the overall global trend of faltering economic recovery. Initial estimates had forecast a 2.3 per cent annualised growth
rate in the second quarter. The actual figure of 3.7 per cent was described as “stellar” by some analysts. An early rise in the US’s record low interest rates now seems a possibility. The data showed that the growth was broad-based, led by
business investment, inventories, and government and consumer spending. The figures came on top of other reports showing gains in consumer confidence and growth in retail sales and housebuilding. The upturn saw the US economy gain 215,000 jobs in July,
while the unemployment rate remained at a seven-year low of 5.3 per cent. The Bureau of Labor Statistics said that gains occurred in retail trade, healthcare, financial activities, and professional and technical services. Private-sector hires grew by 210,000, with gains in
manufacturing and construction supporting service-sector growth. Like China and Japan, countries in the Eurozone – a key focus
for many US companies – are seeing weakening economic growth. The UK, on the other hand, has grown relatively strongly, though analysts are concerned that recent falls in world markets may put future growth at risk.
Global mobility going strong What does the improving US economy mean for relocation
and global mobility? Chris Pardo, VP of Minneapolis-headquartered Plus Relocation,
is upbeat about the current and future shape of US relocation and global mobility. “The last 12 months have told of increased authorisation activity, more-numerous departure and destination lanes, and a greater use of corporate mobility programmes as a tool for enhancing talent management effectiveness.
“The predictions were correct. Last year, 95 per cent of
corporate global mobility professionals told us that their mobility programmes would increase or remain the same with regard to global relocations and assignments. “Those predictions have translated into an almost 20 per
cent increase so far in 2015, on top of the 15 per cent increase the year before. What we love about this growth is that it is not attributed to only a few accounts. Rather, the increases are seen with nearly every single one of our clients and are spread across a variety of industries.” Sean Worker, CEO of BridgeStreet Global hospitality says,
“The recent uptick in US economic growth continues to drive new employment opportunities and inflation in living wages. This economic climate has likewise created a positive effect for relocating employees. Inbound international assignees increasingly find themselves at an advantage, due to the rising value of the American dollar.” Will continuing falls in the price of oil have implications for
relocation? Ivana Gibson, director of Client Engagement at MSI Global Business Solutions, says, “Declining oil prices will affect the US relocation scene in much the same way as they’ll affect many aspects of business. When less is being spent on energy, more can be spent on other things, which some predict will significantly boost GDP. “A stronger economy means that companies will invest more
in growth, particularly in the US, which typically correlates with more relocation. Also, relocating employees will be more likely to purchase homes in their new location, rather than rent.”
New relocation destinations emerging As the economic recovery and expansion into overseas markets
accelerate, where are US companies sending their international assignees? A recent survey by global relocation services provider Cartus,
2014 Global Policy & Practices, found that the top destinations included the US, China, the UK, Singapore and Hong Kong. These were also listed as countries to which companies expected
24 | Re:locate | Autumn 2015
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