The National Association of Business Economics (NABE) recently conducted a survey that found that nearly half of businesses in the United States are short on skilled workers, making it tough on operations. The survey, conducted in the early weeks of October, polled NABE member businesses on conditions in their firms and industries.i
According to the findings, the share of respondents who reported shortages of skilled labor climbed to 47 percent during the third quarter of 2021. That’s up from 32 percent in the second quarter. At the same time, however, shortages of unskilled labor actually declined from 16 percent to 11 percent.
As skilled labor availability declined, hiring decelerated. Thirty percent of respondents cited increased employment at their firms during Q3. Seven percent reported declines. NABE’s net rising index (NRI) for employment declined from 28 percent in Q2 to 23 percent in Q3.
Skilled worker shortages are being felt throughout industries. For example, a new report from the Home Builders Institute indicates that a lack of skilled construction labor is a “key limiting factor” in housing inventory and affordability.ii Plastics Today calls the labor shortage “worse than you thought,” citing additional findings from Gartner, Inc.iii
The NABE survey did not focus entirely on the labor shortage, however. Despite some worrying statistics on that front, there were some positive takeaways.
NABE President David E. Altig commented, “The results of the survey show that conditions remained strong during the third quarter of 2021. Two-thirds of respondents—66 percent—anticipate an increase in real GDP between three and six percent from Q3 2021 to Q3 2022, while 28 percent of respondents forecast real GDP to grow between one-tenth of one percent to three percent.”
“It is clear that the finance, insurance, and real estate sector experienced a strong third quarter according to survey respondents, while the transportation, utilities, information, and communications sector suffered the largest deterioration across the board,” noted NABE Survey Chair Eugenio J. Aleman. “One-third of panelists indicate that the biggest downside risk to their company’s outlook is increased cost pressures, while the biggest upside risk to their company’s outlook is a decline of COVID-19 cases and fears in the U.S., cited by 31 percent of respondents.”
The survey found that 65 percent of firms had increased sales in the third quarter, down just slightly from 66 percent in Q2. Meanwhile, those reporting a decrease in sales increased from 3 percent to 6 percent. The number of companies indicating that wages increased was up to 58 percent in Q3 from 51 percent in Q2.
As far as flexibility for workers goes at this stage in the pandemic, it does appear that companies are continuing to allow more workers do their jobs remotely. Sixty-five percent of respondents said their firms will implement a “flexible/hybrid work environment” even after the pandemic subsides, which is up from 61 percent in Q2. This type of increased flexibility may influence more skilled workers to flock to companies in need.