The glare from the economy’s silver lining may obscure a few dark clouds.
That’s the message from U.S. small businesses, as measured by two national surveys. The studies found economic optimism along with fresh concern about employers’ ability to hire workers in a tight labor market.
“There’s a lack of qualified workers, and that’s a real challenge,” said Sharon Miller, chairwoman of National Small Business United, which commissioned one of the surveys.
A survey for the National Federation of Independent Business detected similar worries. “Labor quality” was offered as the most pressing problem by almost one in five respondents the same number that cited big-government complaints.
“I would predict that even if the economy slows down or we got into a recession the next couple years, the average level of labor market tightness … may stay quite high,” said federation economist Cliff Waldman. “I think this is a long-term uptick.”
The survey findings flesh out anecdotal observations about how the resurgent U.S. economy is affecting American business. Wall Street’s bullishness seems to be echoed on Main Street, the surveys suggest.
“Am I optimistic about the company? Yeah,” said Tim L. Thomas II, president of Fort Worth-based Thomas Electronics Inc., a telecommunications company. “Interest rates are down, inflation is low, we’re not at war with anybody. What could be better?”
A Survey of Small and Mid-Sized Businesses, conducted by the 63,000-member National Small Business United and Arthur Andersen’s Enterprise Group, gathered responses from 953 businesses.
The Independent Business survey has been conducted monthly since 1973 from among the federation’s 600,000 members. The August study, covering 677 responses, was released in mid-September.
Some results replowed familiar ground. Taxes and government regulation were mentioned frequently as small-business banes. But labor issues are edging toward that type of prominence, too.
When those surveyed by the independent business group were asked to rate their single most important challenge, “labor quality” was cited by a record 18 percent. Almost three in 10 respondents said they were having trouble filling at least one job.
More than one in four businesses surveyed by National Small Business United listed “lack of qualified workers” among their top three challenges.
At The Market Antiques and Home Furnishings in Dallas’ Inwood Village, the robust labor market may be the reason behind the smaller crop of job-seekers now queueing up for seasonal work, manager Daneen Foster said.
Foster, who is trying to fill as many as eight temporary positions and one full-time slot, has had only a handful of “really good and qualified applicants not the turnout I usually get.”
Almost six in 10 businesses 58 percent increased employee compensation in the past 12 months, according to the National Small Business United survey.
That’s the highest figure to date in the survey’s six years. But Nancy Pechloff, managing director of the Enterprise Group, said any inflationary impact had been largely offset by productivity increases.
For the future, the surveys found, small and midsize businesses are emphasizing the positive in their economic outlook.
The National Federation of Independent Business’ findings “suggest that the growth rate in the second half of the year may surprise analysts who are predicting a slowdown,” Waldman writes in the group’s Education Foundation Economic Report.
A slightly more tempered picture emerges in the National Small Business United survey. Although roughly two-thirds of business owners project higher profits and revenue this year, those figures are down slightly from 1996 projections in those two categories.
Both samples found small and midsize businesses embracing computers in general and the Internet in particular. Last year, about 26 percent of businesses surveyed used the Internet, according to National Small Business United. This year, the figure topped 43 percent.
