According to a Reuter’s survey released this week, the rate of growth in the American services sector improved somewhat in November while U.S. industrial unit orders rose in October. The Institute for Supply Management said its services index inched up to 54.7 last month from 54.2 in October. The evaluation topped economists’ estimates for growth of 53.5. The survey’s business activity index jumped to 61.2 from 55.4 and hit its highest point since February. New orders were also up, hitting 58.1 after October’s 54.8, the highest the sector has seen since March. Add to that, service workers in the U.S. Northeast will see jobs pick up after years of losses, as the area beefs up attempts to renovate after the destruction brought on by Hurricane Sandy. New York City alone will gain new jobs for at least 10,000 employees in the service sector covering everything from electricians, laborers and carpenters to food and retail workers.
Many of the service oriented companies showing marked increases in the sector are emerging growth businesses such as Titan Machinery, Inc. (NASDAQ: TITN) with a market cap of $491 million. The company operates a network of full service agricultural and construction equipment stores in the United States. Cumulus Media Inc. (NASDAQ: CMLS) owns and operates commercial radio stations in the United States. Another media connected small-cap service company Crown Media Holdings Inc. (NASDAQ: CRWN), has also fared relatively well and is worth a look by investors. At the other end of the spectrum is Krispy Kreme Doughnuts, Inc. (NYSE: KKD). This purveyor of yummy doughnuts, mainly available in the South, has also had a decent year. The company has a loyal following, especially when it comes to their special hot-glazed gems.
Many emerging growth service companies related to construction will likely see increases as the Northeast rebuilds and the service sector shows growth. The area lost thousands of jobs during the recession and could recoup a substantial portion of them from the devastation caused by the storm as businesses rush to hire workers to help with rebuilding efforts. Mantiwoc Company Inc. (NYSE: MTW), which builds cranes used in construction is one such business. In New York and New Jersey metro areas, Home Depot (NYSE: HD) is looking to hire more than 500 interim workers for stores because of bigger demand for everything from drywall to generators.
The bottom line is that growth in the service sector could mean more jobs in all areas, especially in the storm-ravished Northeast. The only fly in the ointment is that the extent of the job growth in the region is still an unknown. With federal grants headed to the area to cover the cost of some of the hiring, perhaps the jobs will become permanent and not just temporary. Here’s hoping.