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Latest “ECO” report from Knoxville Chamber underscores staffing shortages that businesses face

By Kailyn Lamb, Marketing Content Writer and Editor, PYA

Businesses throughout the Knoxville metropolitan statistical area (MSA) continue to be short-staffed as the labor shortage persists. As the Knoxville Chamber reported last month in its “Economic Conditions Outlook” (ECO) report, the State of Tennessee stopped offering pandemic-related unemployment benefits on July 3. In the new June edition of the report, businesses say they `are hoping that this will result in an uptick in hiring.

June’s edition of the “ECO,” which is financed by First Horizon Bank, reported that the labor force decreased slightly from April to May. The number of unemployed people in the Knoxville MSA in May (16,731) was not enough to fill the number of open jobs (37,798).

Businesses that participate in the monthly survey for the “ECO” had slightly better news. For those in manufacturing, businesses reported that general activity was “the same,” while the outlook on projects for the next six months showed “increase.” For this industry sector, businesses reported that the labor shortage caused the most impact on the supply chain and delivery of materials. Both retail and the service industries reported that general business is “improved,” and both reported increases for the six-month outlook. Both industries also reported difficulty in hiring employees, and businesses surveyed in the service industry reported issues with their supply chain.

In the June report, the Chamber also surveyed businesses on the pricing and availability of construction materials. While 61 percent of the businesses reported those two items had not impacted their bottom line, others reported that rising prices of steel, lumber, and commercial roofing materials did impact their business. Shortages in the supply chain are also causing increased lead and delayed delivery times. The lumber prices and shortage of workers are also impacting commercial and residential building activity, according to the report.

Other important trends identified were:

  • The unemployment rate in the Knoxville MSA was 3.9 percent in May. There were 23,649 active job postings in Knox County, up 0.7 percent from April.
  • Home sales also continue to decline in the Knoxville area, as sales fell 14.5 percent from April to May. In Knox County, sales dropped 19.2 percent. The median home sale price in the Knoxville area was $265,000. In Knox County, the median price was slightly higher at $278,000. Active listings are down 75 percent compared to one year ago.
  • The Knoxville MSA collected $113.8 million in state sales taxes in May, down 2.2 percent from April. Knox County collected $72.4 million in May, also down 2.2 percent from April.
  • A total of 263 new business licenses were issued in May 2021. This is up 21.2 percent from last year but is also up 6 percent compared to pre-pandemic numbers in May 2019.
  • A tri-annual report from the East Tennessee Military Affairs Council and the Knoxville Chamber showed the military has an economic impact of nearly $3 billion on East Tennessee. The Military Economic Impact Analysis measured military-related economic activity from fiscal year 2019 within a 50-mile radius of Knoxville. This did not include activity at Oak Ridge National Laboratory, as that information is already included in other studies. The full report can be read here.

Read the full “ECO” here.

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