While the construction industry continues to face challenges getting enough workers to fill job demands, survey responses in a new Wells Fargo Economist Team report indicate that the construction, manufacturing, and transportation industries are suffering from the most acute labor shortages.
- As inflation slowly downshifts, labor quality reemerged as the top problem burdening small businesses.
- Although improving labor supply has aided small businesses in recent months, it seems as though labor is still not plentiful enough to satisfy businesses’ needs.
- A net 42% of small business owners reported that their job openings were hard to fill in July. This measure has drifted down from its record high of 51% in mid-2022 but is still higher than the pre-pandemic average of 36% in 2019. Survey responses indicated that the construction, manufacturing and transportation industries are suffering from the most acute labor shortages.
- Hiring plans similarly improved over the month, yet they continue to trend down through the monthly noise.
- As businesses struggle to find talent, the net percent of firms raising compensation ticked up slightly in July. That said, firms appear to be dialing back plans for future wage increases. The net percent of small business owners planning to raise compensation in July’s survey ticked down to 21%.
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