FORECAST 2022
wage and salary survey usually projects between 400 and 500 job openings for the coming 12 months. Now, though, the number is more than a thousand. So we’re looking at a doubling of the usual hiring activity.” Aggressive hiring is improving the nation’s employment level, a key driver of the consumer
sentiment so vital to the nation’s overall business health. “Unemployment has been declining pretty steadily,” says Scott Hoyt, senior director of consumer economics for Moody’s Analytics. “Jobs are being added at a rate that prior to the pandemic would be viewed as astoundingly good.” Unemployment is expected to be as low as 4.5 percent when 2021 figures are finally tallied, and should decline to 3.4 percent by the end of 2022, a level not far from the “full employment” conditions of the pre-pandemic economy.
Wage Hikes Any tight labor market is likely to spark wage hikes—yet another driver of positive consumer
sentiment. Today’s economy is no exception. “We have seen a significant increase in wages over the past year—as high as 20 percent to 25 percent for lower hourly entry-level employees or machine operators,” says Palisin. Nationwide, increases are running lower, due to normaliza- tion of wages in some industries. “In 2022, we’re looking at 2.6 percent growth in the employ- ment cost index, compared with 2.9 percent for 2021 and 2.6 percent in 2020,” says Hoyt. Economists consider the “employment cost index” as the best measure of actual wage rates. Hoyt adds that “any risks to the accuracy of those numbers is probably on the upside.” Wage rates aren’t the only component of an employer’s labor cost. Toss into the mix a greater number of people employed, a greater number of job positions filled, an increased
number of hours worked, and the total comes to what economists dub “wage and salary income.” And it’s clear that employers nationwide will be shelling out more of that in the coming 12 months. “In 2022, we’re looking at about 4.6 percent growth in wage and salary income, coming off a seven percent increase in 2021, which was up from the 1.3 percent of 2020,” says Hoyt. All
that additional income should
encourage greater consumer spend- ing, a key driver of a healthy economy. And signs are that people have saved up considerable sums of cash that are ready to be spent. Throughout 2020 and early 2021, after-tax income rose much faster than had been anticipated prior to the pandemic. The reason was massive fiscal stimulus in terms of federal economic impact checks and expanded unemployment
insurance
payments. At the same time, consumer spending ran lower than anticipated. “People now have a huge amount of savings,” says Hoyt. “Furthermore, con- sumer credit card borrowing has been weak,
leaving consumers more flex-
ibility to borrow money going forward if they choose to.”
Construction Activity Given healthy corporate growth, it’s little
wonder business investment remains
robust. “Our members in general are expanding, building new warehouses and manufacturing facilities and buying new equipment,” says Palisin. “We are seeing a special uptick in the automa- tion category because of the labor sup- ply issue.” Nationwide, the picture is the same. expects
Moody’s Analytics capital
investment to increase 8.2 percent for both 2021 and 2022, another welcome rebound from the 5.4 percent decline of 2020. Companies are giving a lot of attention to bolstering their intellectual property infrastructure. “Investments in information processing equipment and software is well above its pre-pandemic level as businesses have boosted their IT budgets,” says Yaros. Higher energy
12 Self-Storage NOW! FIRST QUARTER 2022
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