PROVIDENCE – Business activity in New England expanded at a “modest to strong rate” this summer, but employers still said they had difficulty hiring workers and sourcing supplies, according to the Federal Reserve’s Beige Book report released Wednesday.
The report surveys major businesses and employers to gauge economic activity around the country. New England’s report is prepared by the Federal Reserve Bank of Boston.
Building a Stronger Heart: Inside South County Health’s Cardiopulmonary Rehab Program
A Heart-Healthy Start to the Year February is American Heart Month—a time to raise awareness…
Learn More
Employers in the region said they continued to encounter a tight labor market this summer, with a combination of strong labor demand and employment growth in the region. Some employers attributed the shortage to the expanded unemployment benefits that expired on Sept. 6. However, the Federal Reserve noted that employers in states that had discontinued the expanded benefits also reported similar labor issues. Others noted that child care was an issue when hiring candidates, as well.
In addition, some employers in the region said they were having trouble raising wages for new hires due to already-existing pay equity across workers.
Staffing service contacts in New England said clients were lowering required qualifications for job experience for potential candidates, offering training instead. Pay rates also remain elevated for recruited workers. The sector’s contacts also noted that businesses have been citing reliability as a primary concern when seeking candidates.
Businesses in New England also said that overall prices in the region were generally higher, but they were more concerned with sourcing supplies than the cost of goods. Restaurants in the region indicated they were raising prices to cover higher costs of food, delivery and labor costs.
Still, restaurant sales continued to be strong throughout the region, respondents said.
Retail contacts in the region said they were still seeing strong sales in apparel, home decor, salvaged goods and online sales of home furnishings.
New England manufacturing contacts reported higher sales year over year this summer, but many also noted that supply constraints are limiting growth and impacting delivery schedules. Hiring in the sector also remained challenging, businesses said. Despite this, the Federal Reserve said that contacts in the manufacturing sector were generally optimistic in their outlooks and are expecting supply chain disruptions to ease in 2022.
The performance of the region’s commercial real estate sales and leasing sector remained mixed this summer, as the industrial and life science sector remained strong and the retail and office markets continued to operate in uncertainty. Concerns over the delta variant of COVID-19 were said to have dimmed interest in long-term renewals in the office market in the region.
The region’s residential real estate markets also continued to see low inventory and a rise in prices this summer and contacts in the region expected high demand to continue to outpace supply into the fall and winter.
