COVID-19 MAY BE REDUCING SKILLS SHORTAGE, HIRING OUTLOOK IMPROVES

Covid-19 may be taking a bite out of the skills shortage, according to the “Business Conditions Survey” released today by the National Association for Business Economics.
The report, which is based on a survey of 104 NABE members, found 16% reported skilled labor shortages compared to 21% who said the same in a similar report released in April. In addition, those reporting shortages in unskilled labor fell to 3% from 8%.
This month’s report, which looked at overall economic conditions, did find the economic outlook was, overall, more upbeat than April’s report.
“Respondents in this survey report a significant snapback in expectations from the depths reached across nearly all categories in April, suggesting that the economy and business operating environment are no longer on quicksand after the Covid-19 lockdowns in the United States and elsewhere,” said NABE Business Conditions Survey Chair Megan Greene, senior fellow, Harvard Kennedy School.
Respondents’ outlooks for the next three months improved for sales, profit margins, prices, employment, and capital spending. Meanwhile, the second quarter was regarded as the worst since the Great Recession for sales, price, and capital spending.
The outlook for hiring improved in the new survey, with 22% of respondents anticipating increases in employment at their firms, up from 1% in the April survey. However, nearly a fifth of respondents indicated their firms reduced wages and salaries in Q2.
“Firms have imposed a number of special measures to limit the negative financial impact of Covid-19 on their firms, including freezing hiring and terminating and furloughing employees,” Greene said. “One in three firms has resumed normal operations, but nearly as many respondents say they don’t expect their firms to return to normal operations for more than six months.”
NABE’s report also found that 80% of firms expect employees working remotely to some degree of post crisis.