Forecast 2024 (CONT’D FROM PAGE 24)
ing.com ). “While we still have more job openings than un- employed people, the margin is not as large, and we don’t have all the quiet quitting that we had before.” While employers never like having to raise wages, put- ting a cap on paychecks has taken a back seat to a more urgent concern: keeping valuable talent from jumping ship. “The big question now is not so much who can pay the most for entry-level and skilled jobs, but what can they do to retain these folks within their companies,” said Palisin. “Manufacturing in the US over the last year has continued to hire pretty significantly, and we’re not seeing a lot of lay- offs, so that tells you that companies are hoarding talent.” Employers are fine tooling their operations in the areas of workplace flexibility, benefits, and culture changes. Housing Markets Given the generally upbeat consumer sentiment, pros- pects are good for the housing sector, an important driver of the overall economy. “New home sales are running at the top end of the range set in the decade preceding the pandemic,” said Yaros. “One reason is that a lack of existing inventory is pushing buyers to consider new homes. The construction industry is stepping in to close the gap, and housing starts have exceeded expectations.” The construction of new homes is being fueled by a cold hard fact: There aren’t enough existing homes to meet demand. “The 3.1 months’ supply of existing homes
cient workers. “Wage and salary income growth has been strong, fueled by a tight labor market,” said Hoyt. “We're expecting it to increase just a shade over 5 percent both for 2023 and 2024.” In 2022 the growth was a little over 8 percent. Reinforcing the estimates of the economists, Palisin said his members have had to hike their compensation to remain competitive among themselves and other econom- ic sectors. The group’s entry level hourly wages increased an eye-popping 8% to 10% in both 2022 and 2023, far higher than the historic average of 2.5 percent to 3.0 per- cent. Problem No. 2 is a scarcity of workers. Inability to hire enough people—particularly of the skilled variety—can affect the bottom line. Two problems contributing to a labor shortage are the retirement of baby boomers and a post-pandemic reordering many people are making of their life goals. “Demographic structural changes in the US mean we just don’t have, in many cases, the number of workers needed in manufacturing to meet demand,” said Palisin. “That's not going to change.” The situation has become a bit nuanced as the recent economic deceleration resulted in a hiring slowdown. “The labor market is still tight, but it’s not as bad as it was a couple of years ago,” said Bill Conerly, Principal of his own consulting firm in Lake Oswego, Oregon ( conerlyconsult-
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