By Kailyn Lamb, Marketing Content Writer and Editor, PYA
The September edition of the Knoxville Chamber’s “Economic Conditions Outlook” (ECO) report, which is financed by First Horizon Bank, continued to focus on worker shortages as industries reported no improvement in hiring.
Despite that challenge, business remains mostly steady in the three sectors surveyed by the Chamber. Surveyed businesses in the manufacturing sector reported both general activity and the outlook for the next six months were either “improved” or “the same.” In retail, surveyed businesses reported general activity and the six-month outlook was “the same.” In the service industry, general business activity was reported as “mixed,” while the outlook was reported as “the same.”
The latest “ECO” report also looked into how hiring and supply chains are impacting businesses. The manufacturing sector reported disruptions are getting worse and are now impacting the suppliers to their suppliers. Raw materials are limited, and suppliers are unable to fill orders. This is causing a price spike on some materials, as much as a 170 percent increase in some cases. You can read more about price increases in this Associated Press article.
In retail, business comments suggest customers may be reevaluating how and if they spend money because of increased prices and limited supplies. In the service sector, businesses were concerned that the rising rate of inflation may lead to a recession. Businesses also continue to face worker shortages. Some builders reported that construction costs are becoming too high to justify land purchases for commercial building projects.
Since pandemic-related unemployment benefits ended in July, 50 percent of the surveyed businesses said they have not seen an improvement in hiring. Only 9 percent said there was an improvement in hiring for some positions, while 41 percent said they were “not sure yet.” In the manufacturing and retail sectors, it was evenly split between no improvement and “not sure yet.” For the service industry, 50 percent said they saw no improvement, while 39 percent said they were “not sure yet.” However, 11 percent said they saw improvement for some positions, such as entry-level positions, clerical workers, line cooks, and prep cooks. Service businesses said they are still struggling to hire administrative positions, credit analysts, and other experienced professionals.
The unemployment rate in the Knoxville Metropolitan Statistical Area (MSA) in August was 3.5 percent, a decrease from July’s rate of 3.9 percent. There were 39,244 active jobs listings in August, with an estimated 15,226 unemployed people.
A study from Black Box Intelligence and Snagajob looked into data to see where potential restaurant workers were going since many had not returned to the industry. Former restaurant workers cited the long hours, lack of childcare, and the dependence on tips as some of the reasons for leaving the industry. The study found that many of the workers transitioned into jobs in building materials or garden supply stores. Learn more here.
Other important trends identified were:
- While August homes sales in the Knoxville area declined by 0.3 percent, they rose by 4.3 percent in Knox County. The median home sale price in the Knoxville area was $289,000, while Knox County’s median sale price was $305,870. Both areas saw increases of more than 20 percent compared to last year.
- New construction was 8.2 percent of total home sales. In August, 44 percent of homes were sold over asking price (23 percent sold for at least $10,000 above asking price, and 8 percent sold for at least $25,000 over asking price).
- The Knoxville MSA collected $112.4 million in state sales tax during August. This was unchanged from July but increased 14.1 percent from August 2020. Knox County collected $72.09 million in August, a slight decrease from July but an 18.5 percent increase from August last year.
- A total of 232 new business licenses were issued in August, a decrease of 26.6 percent from the same time last year.
Read the full “ECO” report here.