WMC: Workforce shortage remains with recession likely in 2023
A new survey of Wisconsin businesses revealed increased economic uncertainty at the start of 2023, with a majority saying a recession is looming, according to a news release from Wisconsin Manufacturers & Commerce (WMC).
The Wisconsin Employer Survey shows 60% of businesses believe the Wisconsin economy will enter a recession this year. Thirty-nine percent of surveyed employers rated the Wisconsin economy as strong or very strong, a five-point drop from the summer and well below the 53% who said the economy was strong just a year ago. Nationally, Wisconsin businesses are even more concerned. Twenty percent rated the U.S. economy as strong — down from 39% last year.
According to the survey, the uncertainty about the economy has reinforced a pessimistic outlook. In the last four surveys, the number of businesses projecting the Wisconsin economy to grow has dropped from 84% in summer 2021 to just 42% today. In fact, the projection for the national economy is even worse. Only one quarter of those surveyed anticipate U.S. economic growth over the next six months.
On track with previous surveys, 85 percent of businesses are struggling to hire. The workforce shortage has kept unemployment rates low, while driving up wages. According to the Wisconsin Employer Survey, one third of businesses plan to increase wages by more than 4% in 2023, and 84% plan to increase wages by 3% or more.
Despite economic concerns, businesses are still hiring. Sixty percent of respondents plan to increase their number of employees in the next six months. While still a majority, this number has dropped consistently in recent surveys — it was 79% in the summer 2021 survey.