2023 Forecast (CONT’D FROM PAGE 24)
percent. Even so, those increases are expected to affect business profitability. Worker Shortage The tight labor market hits business profitability not only in the form of higher wages, but also in a scarcity of the very workers needed to produce goods and services. “Employers will be very focused on labor availability in 2023 as Baby Boomers continue to retire and the supply of immigrant labor has yet to fully recover from severe pan- demic-related disruptions,” said Yaros. “Despite a slowing economy, layoffs are low, indicating that businesses are holding onto labor in a reaction to the hiring difficulties they encountered during the pandemic.” When will workforce availability increase? Not anytime soon, say observers. “The labor market’s going to be tight for years to come,” said Bill Conerly, Principal of his own
consulting firm in Lake Oswego, Oregon ( conerlyconsult- ing.com ). “The decade from 2020 to 2030 is expected to have the lowest growth of working age population since
the Civil War. One reason is the retirement of the Baby Boomers; another is the low rate of immigration over the last few years.” Palisin agreed that a labor shortage is go- ing to be a long-term condition, and said his members are making moves to lessen the effect. “Employers are trying to be creative in the way they keep and retain workers, not only by offering higher salary rates but also by extending benefits and encourag- ing work flexibility. They are also invest- ing more in automation for labor-intensive tasks.” Retail Slowdown If high employment levels can stress the bottom lines of many employers, they can also fill workers’ pockets with spendable cash. And flush consumers can help drive a robust retail sector, an important slice of the economic pie. “Wage rates, as measured by the Employment Cost Index (ECI), remain very high by the standards of the last cou- ple of decades,” said Scott Hoyt, Senior Di- rector of Consumer Economics for Moody’s Analytics ( economy.com ). Even so, activity is decelerating at the nation’s stores. “2023 is likely to be a chal- lenging year for retail, with growth only at 2.8 percent,” said Hoyt. The projected growth is well below the sector’s historic 4.3 percent average as well as the 8.3 percent increase expected when 2022 numbers are finally tallied. The recent trend is well be- low 2021 when a 17.5 percent increase was fueled by a consumer shift away from ser- vices and toward goods. A slowing economy is contributing to retail’s deceleration, as is a penchant for
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26 October 31, 2022
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