Md. firms struggle to find workers, but remain optimistic in Q2 business climate survey
Originally published in the Baltimore Business Journal
Baltimore-area firms are increasingly optimistic about Maryland's business climate, even as executives at those companies note a skilled worker shortage, a quarterly sales dip and negative impacts from state taxes.
The results come from the recently-revived Maryland Business Climate Survey, which looked at responses from senior executives at 250 Maryland businesses during the second quarter of 2018. The findings were compared with those from the pilot survey conducted between the end of 2017 and the start of 2018.
The survey is conducted by the University of Baltimore's Merrick School of Business, the Jacob France Institute and the nonpartisan Maryland Public Policy Institute. To read the full survey, click here.
Business climate perception:
According to the study, 51 percent of companies in the Baltimore metropolitan area had a positive view of the business climate regionally, up from 39 percent at the end of 2017.
In Baltimore City, outlooks are dimmer. Only 30 percent of city businesses had a positive view of the regional business climate, while 27 percent said they viewed it negatively.
When it comes to Maryland's overall business climate, only 46 percent said it was either pro-business or business friendly. This is only a slight change from last year's 47 percent response. Just 17 percent of respondents said it was unfriendly or anti-business and the remainder, 33 percent, selected neutral.
Perhaps one of the biggest challenges facing businesses, the survey found, is a shortage of skilled workers.
In the past year, 56 percent of businesses had difficulties finding workers with the skills necessary to fill specific job requirements. The survey did not specify which industries struggled in this area.
Most companies, 43 percent, reported shortages associated with long-term workers, not short-term workers. However, 31 percent reported problems finding both short-term and long-term workers.
Only 29 percent of firms surveyed reported any growth in employment when compared with the previous year.
It's a significant problem, business owners say. The report showed 30 percent consider availability of candidates the most important workforce issue facing their business, the highest of any response for that question.
Still, 46 percent of executives said they expect to see an increase in employment at their firms in the next year. That's down from Q4 2017 when 55 percent of firms said employment would increase over the next year.
Fewer Maryland businesses reported sales growth this year than last year, the study showed.
When comparing sales with the previous year, 41 percent of firms saw an increase in sales, while 13 percent saw a decrease.
At the end of 2017, 54 percent of firms had seen a growth over the year prior and 14 percent reported a decrease.
Executives remain positive however, as 60 percent of them say they expect to see an increase in their company's sales over the next year. Only slightly more, 67 percent, said in late 2017 that they expected to see an increase.
Only 6 percent expect to see a sales decline in both the newest report, and the report from late 2017.
Taxes remain a problem for most Maryland businesses, with 59 percent of respondents saying taxes had some negative impact on their operations.
Most firms don't seem to believe taxes impact them too much though, with 10 percent of firms saying taxes had a "great" impact. The majority, 37 percent, said it had no impact, 28 percent said it had a moderate impact and 21 percent said it had little impact.
"Taxes in general" was the most common response given when asked which tax categories were most burdensome, followed by income taxes and payroll taxes.