Lee EBCS: Third Quarter 2023 Report
July 31, 2023 / RERI Research Team
Lee County Executive Business Climate Survey Third Quarter 2023 Report
The first half of 2023 is now over and neither the US nor Southwest Florida experienced some anticipated, yet elusive, recession. Labor market conditions remained strong, as the United States unemployment rate came in at 3.6 percent in June 2023, unchanged from the same month last year. Moreover, labor force participation rates in the nation also improved (62.6 percent in June 2023), albeit still below pre-Covid rate, while force participation level continues to trend up and above pre-Covid levels since August 2022. Preliminary results from the national consumer sentiment index were also positive, with the index rising to 72.6 in July 2023, 13 percent above the June 2023 figure and the highest since September 2021. Joanne Hsu, director of the University of Michigan Survey of Consumers, noted that “all components of the index improved considerably, led by a 19% surge in long-term business conditions and 16% increase in short-run business conditions.”
Both consumer confidence and strong labor market conditions have helped to sustain spending level and economic growth, although indicators suggest a slowing down of economic activity. In July, the Federal Open Market Committee increased the target range for the federal funds rate by 0.25 percentage points to 5.25 to 5.50 percent and at least one other increase is expected for the second half of the year. The increase in interest rates makes borrowing more expensive, disincentivizing consumer expenditures and business capital investment.
Results from the Executive Business Climate Index (EBCI) followed suit with the data observed at the national level. The index rallied in the third quarter of 2023, rising 5.2 points to 57.6. All three components of the index rose, headlined by a 6.7-point increase in future economic conditions. Current economic conditions and future industry conditions rose 4.7 and 4.4 points respectively. Despite these gains, the index remains beneath pre-Covid levels as well, when the index measured at 62.5 during the first quarter of 2020. The National Federation of Independent Business’ Small Business Optimism Index also increased in June 2023 but remains below their 49-year average.
The latest survey also asked respondents questions relating to workforce conditions since Hurricane Ian. The survey found that slightly more than half of respondents have not changed their hiring practices to attract new workers since Hurricane Ian. For those that did change their practices, changing the initial salary was the most common practice, as mentioned by 38 percent of respondents. Salary offerings were also increased due to recent inflationary and market pressures, as indicated by 66 percent of respondents. Two-thirds of respondents said they were not likely to offer the option of remote work since Hurricane Ian.[
Downloads:
Lee County Executive Business Climate Survey Third Quarter 2023 Report
Previous Lee County Executive Business Climate Survey Reports
Acknowledgments:
We would like to thank all of the executives that participated in our survey. Without your continued feedback each quarter, our surveys would not be possible. Furthermore, we would also like to thank our sponsor, the Horizon Council, for helping make the survey happen.
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