Economy Continues To Recover While Labor Shortages Grow

July 27, 2021
National Association for Business Economics releases July 2021 Business Conditions Survey.

Business conditions remained strong in the second quarter, according to the July 21 National Association for Business Economics (NABE) Business Conditions Survey, which indicates that two thirds of survey respondents reported increased sales over the time period. The majority of respondents also continues to anticipate a strong growth trajectory for real GDP.

“A record-high share of respondents reports that profit margins increased at their firms in the second quarter of 2021,” says NABE Business Conditions Survey Chair Eugenio J. Aleman, chief economist, Energy Information Administration (EIA). “At the same time, materials costs rose at a majority of respondents’ firms.

“Respondents continue to be optimistic about the near-term outlook for employment,” continues Aleman. “A third of respondents reported their firms had added workers in the second quarter, and an even higher share expects an increase in their workforce in the next three months.”

The percentage of respondents reporting no shortages during Q2 2021 declined further, to 44% in the July survey, compared to 54% in the April survey. The share of respondents reporting shortages of skilled labor increased to 32% in the July survey, up from 29% in the April survey. Shortages of unskilled labor are reported by 16% of respondents (more than double the 6% reporting such shortages in the April survey), while 17% of respondents indicate intermediate input shortages—up from 10% in the April survey.

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