The always-entertaining and enlightening Bob Hartwig of the Insurance Information Institute was next on the podium – he violates a bunch of “presenting rules” (chiefly talking really fast) and is thereby proof that you can be a very good and very effective presenter by doing what works for you.
His view is historical trends indicate we are a few years away from a return to the bottom side of the insurance cycle. I hope that’s true, but I’m less sanguine.
On the overall economy, he’s predicting growth of around 3% in GDP over the next few years along with a drop in the unemployment rate to below 6 percent (possibly) before the end of the year. That would be good news – for work comp – indeed especially as it comes on top of the addition of over 9 million jobs since April 2010 (even more in the private sector).
Other good news:
- hours worked per week are up to almost pre-recession levels
- average hour day continues to slowly increase, it’s up 14.4 percent since the beginning of the recession.
Growth is going to come in high-frequency industries; construction manufacturing and energy will be big drivers. Construction employment alone is up 565k since January of 2011; we’re still over 1.6 million jobs down from the height just before the crash, altho that was a bubble-driven number.
Manufacturing employment is up 640,000, and those workers are making more stuff than just before the recession, even though there are fewer of them. That means productivity is higher.
Of course, health care employment is up dramatically as well, and will grow faster than any other sector – adding 3 million new jobs over the next 8 years. Energy exploration, production and transport will be another big driver. Employment in this sector is higher than any time in the last 28 years and is going to increase even more.
The net? Lots more employment in high wage sectors are ‘unambiguous positives for the workers comp sector.”