Missouri has nearly bounced back to its workforce levels before the coronavirus came on the scene. A Missouri Chamber of Commerce and Industry report says the Show-Me State is one of the nation’s leaders in its recovery of more than 95% of the jobs.
Ted Abernathy, of Economic Leadership LLC, completed the report for the Missouri Chamber of Commerce and Industry.
He said construction jobs are above pre-pandemic levels and have had the strongest recovery.
“Missouri (construction) is actually up 7.3%, which is one of the highest in the country,” said Abernathy. “The good news about that is that construction is usually a leading indicator. You build things now and you get the results of that later. So, if you’re building new factories or you’re building new commercial offices or even houses, then the people moving in happen after the construction.”
Trade, transportation and utilities jobs have also increased.
Why is Missouri a leader in pandemic-related job recovery?
“I think the state has made a lot of efforts over the last five, seven years on improving the business climate. The other part is that it’s a mix of what you have in your state,” said Abernathy. “So, your mix of agro business and life sciences and the technology parts of your state are just industries that have recovered quickly and are beginning to grow.”
The report also dives into job recovery in some of the urban areas of the state.
“The Joplin area, the Columbia area, Springfield is all back above pre pandemic levels. Kansas City and St. Louis are still down about 2%. St. Joseph is down about 2%. Cape Girardeau is still down about a 1.5%. I think Joplin was the area that had done the best to recover its jobs. That’s normally a product of the type of economies each of those areas have,” he said.
Abernathy said he is keeping a close eye on two industries that took major hits during the pandemic and have struggled to recover – leisure and hospital as well as financial services.
He said in March, the country had the lowest number in nearly 50 years of new people filing for unemployment.
“The latest data suggests that when people are changing jobs, they’re doing so to change industries, more than half of them and for better wages. And so, the quit rates are not quit and stay on the sidelines. So, people are going to work but they’re going to work sometimes in different industries and they’re going to work for more money,” he said.
Abernathy encourages businesses looking for workers to find ways to retain the workers they have through treating them well, matching wages and investing in the recruitment of new graduates. He said staying at a job is also about being a good place to live, including housing, local amenities and childcare options.
With lower birth rates, fewer immigrant workers and an increase in early retirement during the pandemic, he expects a shortage of workers for the foreseeable future.
Mortgage rates are taking a larger bite out of the bank account of new homeowners. Rates have reached more than 5% in the U.S. Abernathy said he thinks rising interest rates will cool the housing market down.
“Two years ago, what the value of the average house was and what the mortgage rate for the average house was, and for a house that two years later you would buy at an increased price with the mortgage rate going from 3.3 to five, it actually means your monthly payments are about 55% to 57% more,” said Abernathy.
He said he expects housing prices to continue to climb, while housing inventory remains in short supply.
As mortgage rates continue to rise, expect those to impact the rental rates for homes and apartments.
“So you’ll probably see rental housing, we saw it go up last year, probably double digits in a lot of the country. It’ll probably go up again pretty substantially this year,” he said.
Abernathy said interest rates have been stable for a long time, housing prices were increasing at predictable rates and wage markets were also fairly stable. He said Missourians need to tune into the economy more to see where it’s headed.
To hear the full Show Me Today interview about the report and the economy (34:30), click below.
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