When it comes to economy, Donald Wallach says he can see into the future with uncanny accuracy.

As president of Wallach Associates, a specialized executive placement service in Rockville, Wallach is able to spot trends in the employment market long before they become government statistics.

"We have a unique pulse on what's going on in this marketplace," Wallach said in an interview. "In March we predicted a recession."

Wallach said that for the past several months he has been receiving hundreds of resumes from young executives in the automotive industry. "These companies don't know I'm getting resumes from their employes. What we see is very disturbing," he said.

Wallach warns of a severe shortage of qualified people in the defense-related research and development field while the market for the field is growing at a tremendous rate. Most of his company's billings come from the placement of these highly paid technology specialists.

Wallach blames the problem partly on an antitechnology backlash resulting from the Vietnam experience. "Technology was blamed for all the evils of the world," he said.

"The bottom line is that for the past several years the percentage of gross national product spent on advanced research and development has been constantly declining," Wallach noted. The government has cut back funding to universities for basic and applied research; universities, in turn, have had to disband certain degree programs, Wallach added.

"We need to reorient our priorities. We have to realize that we are a highly-technology society and the solutions to our problems are through the intelligent application of new technology with appropriate controls for the environment," he said.

Wallach's firm differs from most executive recruiting firms in that it caters exclusively to research and development and systems personnel in the $25,000-to-$60,000-a-year salary range. Last year the firm placed 150 persons, and next year Wallach has set a goal of $1 billion in annual billings.

But the company is not finding qualified candidates as easily as in the past. The recruitment budget -- which includes money for advertising, direct mail and telephone solicitation -- is triple what it was last year.

Wallach Associates does most of its work in the Washington area. "Washington is the computer systems center of the world, because the government isn't equipped to do this type of work," he said. Still, Wallach has difficulty getting people to relocate in the D.C. area because the cost of living is so high.