The U.S. temporary staffing industry will grow 6% in 2015 and another 5% in 2016 to reach a record industry size of $121.0 billion in 2016, according to the “U.S. Staffing Industry Forecast: April 2015 Update” released by Staffing Industry Analysts.

The US place and search industry will expand 9% in 2015 and increase 7% in 2016.

Combining temporary staffing and place and search, the forecast calls for the total US staffing industry to grow 6% in 2015 and 5% in 2016 to reach $139.1 billion.

“We believe that 2015 will have the fastest GDP growth in a decade, creating immense opportunity for the US staffing industry in the form of an additional $7.8 billion in staffing revenue nationwide versus 2014,” said Research Manager Timothy Landhuis, who wrote the report. “At the same time, we note that we are seeing many signs that the US economy is moving into a later stage of its growth cycle, with unemployment falling, labor markets tightening and more evidence of wage inflation. The implications for staffing firms include staying on top of wage inflation, responding to greater recruiting challenges, and having disciplined business processes in place in order to thrive when the inevitable downturn in the economy arrives.”

The forecast predicts growth for all temporary staffing skill segments in 2015, including 6% growth in industrial, 4% growth in office/clerical, and 7% growth for both IT and healthcare staffing.

The segment with the lowest growth forecast in 2015 is engineering staffing, caused by a lack of recovery in employment since the recession and a downturn in oil and gas exploration and production. The segment with the highest growth forecast in 2015 is education staffing, given that this is a relatively small and emerging segment that is just beginning to generate nationwide demand among K-12 school districts.

The Affordable Care Act will contribute an incremental 1% to 2% of revenue growth in 2015 for both the industrial and office/clerical segments, and an incremental 1% in 2016, as administrative and insurance costs are passed through to clients, according to the forecast.

The staffing industry forecast is based on expected US GDP growth of 2.9% — the fastest rate in a decade — in 2015 and 2.7% in 2016, which forecasters expect will drive continued volume growth in temporary staffing. In addition, the forecast expects staffing firm revenues in the next two years will be aided by accelerating wage inflation signaled by falling unemployment rates and increased scarcity of candidates.

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