Author: Joshua Levy
In uncertain economic times, business leaders, policymakers and the general public want to know what’s currently happening as well as the future course things might take. Following the sudden and unprecedented shock caused by the pandemic in the Spring of 2020, a variety of “real time” indicators were created to measure rapidly changing economic conditions. One such response from the US Census Bureau was the creation of “pulse” surveys of businesses and households which could quickly measure changes on a weekly basis as they tracked a panel of respondents over time.
Inspired by this trend, LEAD created and launched the NC Business Pulse Survey in October of 2021 with support from MyFutureNC and the Duke Energy Foundation. Working with our partners at the NCWorks Commission, we designed and launched a monthly survey of North Carolina businesses of all sizes and industries to try to quickly gauge their top concerns and outlook for the near future. The survey is based on a convenience sample of businesses who volunteered to participate and therefore is not necessarily representative of all businesses in the state. However, the survey can still provide valuable insights into what’s happening in the business community—and we are still accepting new businesses into the survey (click here to learn more).
Here are some of the key findings from the first 9 months of the survey:
Finding enough workers is the top concern
Maintaining adequate staffing levels has consistently been the top concern of employers, with about 65 percent of employers choosing this as a current concern. This is followed by obtaining inputs and raw materials for their business (over half of employers said this), and financial stability. Health concerns for employees and customers have fallen sharply to very low levels over the past three months despite the ongoing pandemic. Recently, the percentage of employers listing “financial instability” as a concern has increased and may reflect rising interest rates, ongoing inflation and worries about a future recession.
Most businesses are meeting or exceeding their revenue expectations
For the first nine months of the survey, about half of employers said they met their monthly revenue expectations, with about another 20 percent saying they exceeded their goals. This means about one-third of businesses failed to meet their expectations. While there has been some volatility in these numbers, it is reassuring that 70 percent are meeting or exceeding their monthly revenue goals.
Remote work has decreased over the past 3 months
Since October, employers have estimated that one-quarter of all hours were worked remotely, but in the past three months that has fallen to about 13 percent. About half of the businesses do no remote work (a number that has fluctuated slightly month-to-month but increased in the latest survey). Forty percent report working remotely a little (up to a quarter of their total hours), and the percent of businesses in this category has grown steadily over the past four months. At the other end of the spectrum, a declining percentage of employers are 100 percent remote – 4 percent as of May, down from 11 percent three months prior.
Employers still plan to hire workers, increase wages and training, and invest in new technology
Over the course of the nine months since the survey began, about half of employers have consistently said they plan to increase their staffing levels over the next six months. Just under 40 percent said they plan to raise wages and increase training for their workers – figures that have been steady but have declined over the past three months. Those planning to invest in new technology or automation have also declined over the past three surveys and has dropped from 45 percent in October to 33 percent in June.
Business optimism remains high, but cracks may be showing
Despite concerns about staffing and raw materials, employers remain optimistic about the current state of their business as well as the outlook over the next six months. Employers have consistently ranked the current state of their business as a 7 out of 10 since the survey began, and until recently over 40 percent thought conditions would improve over the next six months. In the past three months this percentage has declined to 28 percent of employers who still think things will improve. About 23 percent of employers think conditions will decline, a percentage which has increased over the past few months. It will be worth keeping an eye on this indicator as interest rates rise and predictions of a future recession saturate the media.
Keep an eye on our dashboard going forward as we continue to take the pulse of the state’s businesses in these unpredictable times…