August “ECO” report shows continued hiring trouble, new Census data
The regional worker shortage continues as data shows the labor force in the Knoxville metropolitan statistical area (MSA) grew by less than one percent from June to July.
In the August edition of the Knoxville Chamber’s “Economic Conditions Outlook” (ECO) report, which is financed by First Horizon Bank, surveyed businesses in the manufacturing, retail, and service industries continued to report difficulties with both hiring and supply chains. Many restaurants reported they needed to limit seating capacity due to staffing shortages. Many are also considering closing one day per week to give current staff a day off.
Supply chain challenges may cause businesses to pass on increased costs to customers by raising prices. In the “ECO” report, all the manufacturing and retail businesses reported being impacted by supply chain interruptions, while 59 percent of businesses in the service industry reported that they were not affected. According to Drewry Supply Chain Advisors, a London-based company that provides research and consulting services on the maritime and shipping industry, freight rates for shipping goods from China to North America and Europe have continued to increase over the past few months. Read the report here.
Participating businesses in the manufacturing and retail industries both said general business activity was “improved” compared to last month. Businesses in both sectors also projected “increases” for the next six months. Businesses in the service industry had “mixed” reports on general business activity, with “increases” projected for the six-month outlook.
The unemployment rate in the Knoxville MSA was 3.9 percent in July, which was lower than June’s rate of 4.8 percent. In July, there were 39,175 active job listings in the Knoxville MSA. The “ECO” estimated that there were around 17,000 unemployed workers in the area in July.
Some Census data from 2020 has been released, showing that the Knoxville MSA population grew by 26 percent (from 698,030 to 879,773) from 2010 to 2020. While age data has not yet been released, the Knoxville area growth rate was the largest of the four metropolitan areas in Tennessee.
The area is also becoming more diverse. The number of people identifying as belonging to two or more races in the Knoxville MSA grew by 326.2 percent. The white population in the area grew by 19.2 percent. The Black population grew by more than 11 percent. The Asian and Hispanic/Latino populations in the area grew at a larger rate, 51 percent, and 87 percent, respectively. The American Indian population in the Knoxville area also grew by more than 63 percent. View the Tennessee State Data Center here.
Other important trends identified were:
- Home sales in the Knoxville area fell by 0.8 percent from June, and by a similar rate in Knox County. The median home sale price in the Knoxville area was $285,000, a year-over-year increase of 21.3 percent. Active housing listings are down 37 percent compared to this time last year.
- The Knoxville MSA collected $112.4 million in state sales tax in July, a slight decrease from June. In Knox County, $72.1 million in state sales tax were collected, which was a slight increase from the month before.
- There were 281 new business licenses issued in July, a decrease of nearly 11 percent from the same time in 2020. This is the first time this year that the number of licenses issued has been lower than the same month last year according to the “ECO.”
You can read the full “ECO” report here.