Jimmy Rodefer: Economic optimism increasing in the U.S. and Tennessee

Economic optimism in the southern United States is up, nationally employers are looking to hire more workers, and business leaders’ economic optimism is growing.

The biggest problem businesses are facing at present? It’s finding skilled and qualified workers. That fact, in theory, should make for attractive employment opportunities for those willing or able to meet companies’ needs. The optimism and employment numbers are among the findings of the “Business and Industry Economic Outlook Survey, Detailed Results for 2017’s Third Quarter,” of the Association of International Certified Professional Accountants. The survey, taken primarily of chief executive officers, chief financial officers, and controllers, was conducted Aug. 1 – 16 and received 775 qualified responses.

Business optimism in the U.S.’s southern region was at 68 percent (anything over 50 is classified as optimistic; below 50 is a negative outlook). This was a three-point improvement over the year’s second quarter. The one region to surpass the south’s optimism was the Midwest; its score of 74 percent was a nine-point jump from the previous quarter. The western U.S. saw an optimism decline of one point, to 61 percent, while the northeast brought up the rear, at 59 percent, also with a one-point drop. Twenty-four percent of survey respondents nationally said they have too few employees and were planning to hire. That desire runs headlong into where they’ll find qualified employees. Concerns of business leaders have morphed in the last year from what government
might do on the regulatory front to finding quality and qualified workers to fill jobs presently available as well as those to come.

The final two quarters of 2016 saw regulatory requirements and changes as the top issue for business leaders. That was replaced in 2017’s first two quarters by employee and benefits costs, which tumbled to fifth place in the third quarter. “Availability of skilled personnel” hasn’t fallen lower during the past year than fourth place on the list of business leaders’ issues, indicating its consistency as a problem with which leaders feel they’re dealing.

Anticipated rate of headcount increase for the coming year increased from 1.8% to 1.9%; the highest level since Q4 2014. Salary and benefit costs projected to increase at a rate of 2.4%, up two tenths from 2.2% in Q2,” the survey said. Of those numbers, the Journal of Accountancy reported, “The projected change in employees during the next 12 months is at its second-highest post-recession percentage and fifth-highest in the past 10 years of the survey. The current projection of 1.9% growth in staffing is the highest since 2.1% was projected in the fourth quarter of 2014...”

The economic optimism results dovetail with another AICPA report, released in July, in which the AICPA announced that Americans’ personal financial satisfaction had hit a 10-year high.

The 10-year high was primarily driven by three factors: the PFS 750 Market Index maintaining a record-high, job openings per capita climbing to a record-high and a significant decrease in the inflation measure from the prior quarter,” it said. The PFS 750 Market Index is made up of the 750 biggest companies according to market capitalization trading on the U.S. market (not including mutual funds and Exchange Traded Funds, or ETFs).

Tennessee is also citing positive economic news. The August 2017 Tennessee Quarterly Business and Economic Indicators report released by the Secretary of State’s office forecasts increasing employment in 2017’s the third and fourth quarters. Optimism is a fluid thing. Depending on factors in play at any given time economic optimism can descend like a rock in water or rise like a helium-filled balloon. At present an increasing number of decision-makers feel good about the direction of the U.S. and Tennessee economies and are planning to hire more workers. And that’s something about which to be optimistic.

This article originally ran in the Knoxville News Sentinel on September 24, 2017. 

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Tagged #JimmyTalk, Economic optimism, Employment