Massachusetts employers are having trouble filling job openings despite the Bay State’s 8.2 percent unemployment, according to the AIM Business Confidence Index (BCI) released this morning.
Fifty-two percent of AIM member employers who responded to the monthly BCI survey for March indicated that they are encountering problems finding qualified people to work at their companies.
“The biggest problem they cited was lack of people with required skills in the applicant pool; in some cases they reported that applicants with technical skills lacked other relevant skills,” said Raymond Torto, Global Chief Economist at CB Richard Ellis Group, Inc., and Chair of the AIM Board of Economic Advisors.
“There is a debate as to the cause of this problem. Some employers believe that unemployment insurance benefits are deterring return to work, and others noted the lack of skills of applicants or the lack of training resources for new hires. Persistent high unemployment is our most serious concern in this economic recovery, so these finding are very significant.”
The March BCI rebounded 2.8 points during March after declining the previous month in the face of rising energy prices and political instability overseas. The index has remained in positive territory for six consecutive months, fluctuating within a narrow positive range since hitting a three-year high of 55.3 in October.
The leveling off of business confidence reflects the slowing of overall economic growth in Massachusetts and throughout the country after a steady 18-month recovery. The BCI for the first quarter of 2011 was 53.5 - much healthier than the same period in 2010 (45.6) or 2009 (34.5), or even 2008 (49.4), but barely stronger than the fourth quarter of 2010 (53.3).
Every component of business confidence gained ground during March. The Massachusetts Index of business conditions prevailing within the commonwealth added a point to 49.7, while the U.S. Index of national conditions rose 1.5 to 45.5. Since March 2010, the state indicator was ahead 9.1, its national counterpart 6.6 points.
“The employment data revisions issued in March alter our understanding of the shape of the recession here in Massachusetts,” said Professor Alan Clayton-Matthews of the School of Public Policy and Urban Affairs at Northeastern University, a BEA member.
“Our job loss was less serious than first appeared, and we’ve added fewer since the trough, winding up in about the same place. The new numbers still support the perception of Massachusetts employers that conditions here have been somewhat better than the national average.”
AIM’s Business Confidence Index has been issued monthly since July 1991. Its historical high was 68.5, attained in 1997 and 1998; its all-time low was 33.3 in February 2009. The Index’s March reading was up 7.2 from a year earlier, 20.5 over two years, and 6.6 compared to March 2008, which saw the first “negative” reading of the recent recession.