Dallas Fed Survey Shows Growth Cooling, but Still Decent
2022.04.25 18:46
By Geoffrey Smith
Investing.com — Fresh evidence of skills shortages increasingly hurting the U.S. economic rebound emerged on Monday, as a closely-watched regional business survey pointed to increasing difficulty in finding qualified workers.
The Dallas Federal Reserve’s monthly survey of manufacturing showed that factory activity expanded at a moderate pace in April, cooling a little from March to be in line with its historical average, the regional central bank said. The production index, a key measure of state manufacturing conditions, ticked down two points to 10.8.
However, in the survey’s more revealing supplementary questions, businesses complained that it is increasingly hard to find staff. Some two-thirds of companies responding to the survey said they were looking to hire, while only one-third said they weren’t. But three-quarters of respondents, when asked what was stopping them hiring, answered that there were either no suitable applicants or not enough, more than at any time in the last 15 months.
Despite healthy current conditions, with output and prices both strong and new orders inching up in April, the Dallas Fed said that its outlook index had fallen sharply to its lowest level in two years.
The lifting of pandemic-driven restrictions continues to support business activity in general, and the survey responses suggested at least some businesses are chafing to return to pre-pandemic working practices, reversing the drift to remote working that has happened over the last two years.
“We are effectively ‘done’ with the pandemic,” one manufacturer responded. “No masks required, and we returned to ‘normal’ shifts and work modes.”
Another complained that: “We need to wean people back to the office. We lose effectiveness with office personnel at home.”
Getting people – especially working mothers, who were disproportionately hit during the pandemic – back to work has also become easier as the number of school disruptions has fallen. The survey showed that a lack of childcare options was cited by only 7.7% of companies as an obstacle to hiring, the lowest in over a year.
