Economic activity continued to expand from early January through mid-February, according to the Federal Reserve Board’s latest report on regional economies (known as the “beige book”). Employment levels remained stable or continued to grow in most districts and across a variety of sectors. Contacts in several districts noted strong labor demand and challenges filling a variety of skilled positions. Staffing firms reported mixed demand, with some noting difficulty finding workers to fill orders, in part due to inclement weather. Wage pressures were moderate across most of the country, but contacts in some districts reported wages increased to attract skilled workers for difficult-to-fill positions.
Business contacts in the district were fairly upbeat, notwithstanding selective negative effects from unseasonably severe weather in southern New England. Most responding retailers and all contacted manufacturers reported sales growth from a year earlier; software and information technology services firms also cited revenue increases. By contrast, staffing firms saw business activity soften due to weather closures. Most staffing firms reported year-to-year revenue declines in the high single-digit to low double-digit range. In general, labor demand continued to be strong, although labor markets were largely unchanged, as most business contacts were doing minimal hiring; nonetheless, staffing firms cited inadequate labor supply as their main challenge.
Growth in the district’s economy continued to expand at a moderate pace. Businesses reported that, selling prices remained mostly stable and cost pressures increased, including more widespread indications of rising wages. Labor market conditions, more generally, showed further signs of strengthening in early 2015. One major New York City staffing firm maintained that the job market has tightened considerably in recent months and that it is stronger, across the board, than it has been in eight years. More broadly, business contacts reported that they continue to increase employment, and considerably more firms plan to add jobs in the months ahead. Service-sector firms also indicated increasingly widespread wage hikes.
Aggregate business activity in the district continued to grow at a modest pace. Staffing contacts throughout the district reported positive employment trends across a broad spectrum of economic sectors. Companies reportedly kept busy at year-end and saw less of the typical slump in the demand for temporary employees. Firms reported that direct hires picked up, that the majority of hires were due to economic growth rather than replacement, and that temporary placements were stronger still when compared with last year, when winter storms closed businesses for several days at a time. Staffing firms remained very positive about growth prospects in 2015. Staffing contacts described tight margins and little change in wage pressures.
The district’s economy expanded at a modest pace during the six-week reporting period. Activity at manufacturing plants was mixed. Looking forward, manufacturers were fairly bullish about business activity. Payrolls were little changed on net, except in manufacturing, where demand for production and sales personnel increased. Staffing firms reported that job openings and placements in financial services, health care, and manufacturing had risen slightly. Upward pressure on wages was limited to experienced and technically skilled personnel across industry sectors.
The district’s economy grew at a slower pace during the most recent reporting period. Reports on labor demand were mostly positive. Contacts across the district reported the recent hiring of engineers, salespeople, production workers, marketers, and retail workers. Demand for employees rose in construction, hospitality, manufacturing, information technology, grocery, transportation, and management. An executive said that demand had recently increased for part-time workers but was basically flat for full-time employees. Throughout the district, several industries reported continued difficulty finding both unskilled and skilled labor. An office staffing executive in Charleston, SC, remarked that a shortage of quality candidates was leading to multiple job offers and some upward wage pressure. Similarly, the shortage of truck drivers was pushing up wages, according to one report.
The district’s economy continued to grow at a moderate pace. The majority of contacts were optimistic and expected near-term growth to be sustained at, or slightly above, current rates. On balance, the district’s labor force continued to grow. However, contacts continued to report difficulty filling skilled workers in the information technology, finance, construction, and manufacturing industries. In addition, a number of contacts noted that entry-level positions in retail and other service-based businesses were becoming more difficult to fill. Some firms engaged in energy exploration and production and oilfield service providers reported layoffs resulting from declines in energy prices. Plans for wage increases in 2015 were little changed, with most contacts budgeting 2%–3% increases for the year. However, figures remained higher for more competitive or difficult-to-fill positions, and several contacts indicated they were increasing entry-level wages.
Growth in economic activity in the district remained moderate. Consumer spending and manufacturing production rose modestly. The pace of hiring slowed, but contacts expect continued moderate employment growth in the next six to 12 months. A staffing firm reported demand was holding steady but that job placements were down because it had become increasing difficult to find workers to fill clients’ orders. Contacts again reported strong demand for skilled workers, particularly for those in professional and technical occupations and skilled manufacturing and building trades. Wage pressures continued to be more pronounced for skilled workers than for unskilled workers. However, a staffing firm reported some willingness from its clients to raise pay rates for unskilled workers in order to reduce turnover.
Economic activity in the district increased at a moderate pace. Reports of planned activity in manufacturing and services were positive on net. Over the past three months, compared with the same period a year ago, wages grew moderately and employment and prices charged to consumers grew modestly. Firms that manufacture electronic equipment and primary metals announced plans to lay off workers or close facilities. Firms that provide business support, air and truck transportation, recreation, and health care and social assistance services reported new hiring and expansion plans. In contrast, firms in publishing services plan to lay off employees.
The district economy grew at a moderate pace since the previous report. Increased activity was noted in consumer spending, commercial construction, commercial real estate, professional services, and manufacturing. While labor markets continued to tighten in several areas, signs of loosening were noted in energy production. Business owners in South Dakota noted difficulty finding workers to fill openings for skilled construction and manufacturing positions. A Minnesota staffing firm reported that finding workers was difficult and that competition increased. At the same time, a retailer in Minnesota announced 550 job cuts, and a plant that salvages electronics parts closed. Decreased oil- and gas-drilling activity in western North Dakota and eastern Montana led to reduced hours and layoffs of oilfield workers. The number of job postings in the region also decreased, but several companies in a variety of sectors are still looking for employees.
The district economy continued to grow slightly, and most contacts remained optimistic about future activity. District manufacturing and other business activity rose as increases in transportation, professional, high-tech services, and wholesale trade activity outweighed small declines in overall manufacturing production. Manufacturers’ capital spending plans were not as strong as in the previous report, but hiring plans remained solid. Transportation firms reported stronger activity, and sales were above year-ago levels—with solid expectations for future months. Professional, high-tech services, and wholesale trade contacts also noted a slight increase in sales but said the pace of growth was expected to slow slightly in coming months. A few contacts noted a short supply of truck drivers, managers, skilled technicians, and information technology developers.
The district’s economy expanded at roughly the same pace as in the prior reporting period. Retailers and auto dealers noted stable employment levels, while manufacturers noted flat to increased employment. A few staffing, financial, and transportation services firms reported increased payrolls. Accounting firms said they hired new classes of interns for the tax season, expecting many of them will transition into full-time jobs. Law firms noted increased competition for top law students. Energy firms said they have halted hiring and started downsizing. Staffing firms noted strong demand for information technology professionals and they generally saw little to no wage pressure. High-tech manufacturers reported continued wage pressures for highly skilled workers. Demand for staffing services was flat to higher, and outlooks were positive but much more cautious than in the previous report.
Economic activity in the district continued to improve moderately during the reporting period. Overall price and wage inflation remained modest. Retail sales and demand for business and consumer services increased moderately. Overall manufacturing activity picked up, while agricultural conditions were mixed. Labor shortages boosted wages of truck drivers, aerospace engineers, and construction machinists and framers. Some contacts noted that increases in employee medical insurance premiums tended to offset any increases in wages and salaries.
About the American Staffing Association
The American Staffing Association is the voice of the U.S. staffing, recruiting, and workforce solutions industry. ASA and its affiliated chapters advance the interests of the industry across all sectors through advocacy, research, education, and the promotion of high standards of legal, ethical, and professional practices. For more information about ASA, visit americanstaffing.net.