Barometer is pointing to a big recruitment freeze

ONE MORE THING CIARAN HANCOCKIRELAND'S BIGGEST recruitment firm CPL issued a profit warning this week and we should all be worried. Forget what the economists, politicians and bankers have to say - there are few better baromoters for activity than recruiters.

That was certainly the view of CPL boss Ann Heraty when she did an interview with The Irish Times about 12 months ago, in advance of heading to Monaco to represent Ireland in the world version of the Ernst & Young Entrepreneur of the Year competition.

"I think when there is a slowdown, we'll see it first," Heraty said last June. "We did the last time with the technology sector [ in 2000]. I'd say we saw it about four to six months ahead of the market actually slowing down. I don't have a sense of that happening at the moment."

What a difference a year makes. CPL's shares nosedived 28 per cent on Wednesday on news that its profit before tax for the year to the end of June would be about 15 per cent below expectations.

CPL said the reduction in economic growth in Ireland in recent months had affected many of its markets, especially the recruitment of permanent staff, which makes up most of its business. "In March we started to see a change but we thought the way that Easter fell we felt that we would have a recovery in April," Ms Heraty said. "But we have not seen that recovery."

It's hardly surprising. Housing output has dried up to a trickle, job loss announcements are almost a daily occurrence, there are reports of a recruitment freeze in the banking sector and even Ryanair boss Michael O'Leary has taken a pay freeze. A few head office jobs from UK drug company Shire, welcome though they are, won't change that.

With inflation hovering about 5 per cent and our jobless rate at its highest in almost a decade, the party looks over for the Celtic Tiger. Especially against a backdrop of a global credit crunch and economic decline in both the United States and Britain.

Not that Heraty need have too many sleepless nights. She sold more than €30 million worth of CPL shares over the past couple of years, leaving her well placed to weather any recession.