Supply chain issues leading to inflation concern from Knoxville businesses
By Kailyn Lamb, Marketing Content Writer and Editor, PYA
Supply chain issues continue to plague local businesses as Knoxville heads toward the holiday season.
In the October issue of the Knoxville Chamber’s “Economic Conditions Outlook” (ECO) report, which is financed by First Horizon Bank, businesses surveyed in the manufacturing sector commented that supply chain issues continue to be worsening. Many reported increases in delivery time and increases in prices paid for raw materials. Those in manufacturing were also split between reporting general business activity and the outlook for the next six months as “worse” or “the same.”
For the retail sector, businesses were split on general activity being “improved” or “the same.” Six-month outlooks for the business were “improved.” Retail businesses also commented that increased prices for raw goods were causing inflation and that they need more employees to meet customer demand. In the service sector, businesses reported general activity as “mixed,” with outlooks reported as “the same.” Much like the other two sectors, service businesses commented with their concern about the inflation of prices.
If you are interested in participating in being surveyed as part of the Chamber’s monthly “ECO” report, please click here.
Labor shortages are also a continuing problem for businesses. On a positive note, the unemployment rate in the Knoxville Metropolitan Statistical Area (MSA) was 2.9 percent, lower than August’s rate of 3.5 percent. It is also lower than the state of Tennessee’s unemployment rate, which was 3.5 percent in September. The national unemployment rate for September was 4.6 percent.
In September there were 39,883 active, unique job postings in the Knoxville MSA. The number of unemployed workers decreased by 19 percent from August to September, from 15,226 to 12,334. According to the “ECO” report, this means that if every unemployed person was hired, they would fill only 31 percent of available jobs. Read more about the job shortage in this teknovation.biz article.
Childcare may be one of the many factors preventing people from returning to the workforce. According to the report, Child Care Aware of America estimated that as much as 9 percent of childcare businesses closed during the pandemic.
Other important trends identified were:
- September home sales in the Knoxville area increased by 9.6 percent and increased in Knox County by 7 percent compared to August. In the Knoxville area, the median home price was $285,000, an increase of 20 percent compared to prices last year. Knox County saw a similar increase, with median home prices going up 17.2 percent compared to 2020. The median sale price was $293,000 in the county.
- Homes also continue to sell over the asking price, with around 21 percent selling for at least $10,000 over and 7.6 percent selling for at least $25,000 over. New homes represented 7.3 percent of housing sales, but only 20 percent of those were ready to have owners move in.
- In September, the Knoxville MSA collected $106.8 million in state sales tax, down 5 percent from August. Knox County collected $69 million in state sales tax, also down around 4.3 percent from August.
- A total of 259 new business licenses were issued in September, down nearly 4 percent compared to September 2020. However, it is an increase of nearly 10 percent compared to pre-pandemic September 2019.
You can read the full report here.
