Local business leaders optimistic national economy: Wage and price inflation noted by respondents

When asked about their expectations for U.S. economic activity over the next six months, 47% expect an increase while only 15% expect a decrease. Again, this is considerably better than last quarter in which only 18% expected an increase. As was the case in November, there was even more optimism about the respondents' own businesses with 68% expecting increased activity (compared to 43% in November).

Diffusion indexes increased across the board since November. On the questions of wages and prices, the diffusion indexes were especially high, indicating an expectation of wage and price pressure in the months to come.

While this is an indication that some level of inflation expectations remain among local businesses, this survey does not ask about the expected level of inflation.

This quarter's special focus question was on the availability of labor. Specifically, we asked business leaders to rate their level of agreement with the following statements:

• I am concerned about the availability of qualified employees for my business.
• My own business has experienced increased difficulty in hiring qualified employees.

We asked the first question in our Quarterly Market Report for 2024 Q2. At that time, 39% answered "strongly agree" and 35% answered "agree."

This time, about the same percentage (35%) answered "strongly agree" while 50% answered "agree." A clear majority answered either "strongly agree" or "agree" to the second question indicating that they had experienced increased difficulty in hiring qualified employees in their own business.

To address the issue of labor availability, Grow Quad Cities has published our Top 100 High-Priority Jobs Report detailing 100 occupations in the Quad Cities expected to have over 3,000 openings per year and hundreds of net new jobs by 2028. Keep up with updates on the Quad Cities labor market on our Weekly Economic Trends and Indicators blog.

Beginning with the 2023 Q3 Quarterly Market Report, the Chamber has conducted a survey of local businesses to gauge the state of the Quad Cities economy. This survey is similar to surveys conducted by groups around the country, in that it asks some basic questions about the respondent’s assessment of economic activity, wages, hiring, capital expenditures and a few other indicators. The options for each question are “increasing,” “decreasing” or “no change.” A “diffusion index” is calculated for each question, which is simply the difference in percentage points between “increasing” and “decreasing.” This diffusion index captures the degree to which respondents as a group feel that a certain aspect of the business climate is changing in one direction or the other.

The responses this quarter are a representative mix of companies from the region with 21% manufacturing, 13% retail, 49% service providers and 17% other. (In some lines of the tables, percentages may not total 100 due to rounding.)

This survey is a regular feature of the Quarterly Market Report, and we invite our members and other local businesses to watch for the survey invitation next quarter.

As the difference in responses between manufacturing and non-manufacturing companies was not significant, only the overall results were reported this quarter.