Mercer survey shows labor issues worry Middle Georgia businesses

While many businesses across the midstate seem to have had a good feeling about the first half of the year, they may not be carrying over that positive outlook to the second half.

That perspective came from Mercer University’s Mid-Year Middle Georgia Economic Outlook Survey, released in recent days. It was taken July 29-Aug. 12.

“The results of the survey indicate that businesses in Middle Georgia seem to have wrapped a positive first half of the year, consolidating the momentum gained during 2014, and remain cautiously optimistic about the second half of 2015,” Antonio Saravia, assistant professor of economics and director of the BB&T Center, who compiled the results, said in a statement.

The survey was conducted by the BB&T Center for Undergraduate Research in Public Policy and Capitalism in Mercer’s Eugene W. Stetson School of Business and Economics. About 400 business people responded to the survey, which was done in partnership with the chambers of commerce in Macon-Bibb, Houston, Monroe, Baldwin, Jones, Crawford and Wilkinson counties.

“We qualify the optimism as cautious because, despite the positive outlook for the economy in Middle Georgia, a large number of businesses do not identify the second half of 2015 as a good time to expand their operations,” Saravia said. “In addition, respondents continue to identify government regulations and/or red tape, taxes and the quality of labor as the top three obstacles to their business activities. Importantly, businesses have also mentioned that they have a difficult time convincing their talent to move to Macon.”

The majority of survey respondents -- 67 percent -- referred to the federal level of regulations and red tape.

Nearly 60 percent of respondents said their outlook on Middle Georgia’s economy for the second half of the year was about the same as the first half, with about 35 percent saying they thought it would be better. But only about 30 percent said it was likely they would expand their business during the second half of the year.

“In general, businesses in Middle Georgia indicated that it was not easy to fill vacancies during the first half of the year,” according to the survey.

Mike Dyer, president/CEO of the Greater Macon Chamber of Commerce, agreed that labor issues continue to be a concern.

“Across the board, we do have some workforce issues, from warehouse positions and truck drivers all the way up to physicians,” Dyer said. “It’s a challenge with our workforce because of the years we’ve been dealing with a lot of dropouts.”

Another problem is losing midstate college graduates who go somewhere else to work, he said.

Dyer said he didn’t think it was tough for companies to recruit the talent to work in high level service organizations, such as accounting firms and hospitals and probably engineering firms.

“If you are bringing physicians in, for example, the K-through-12 school system is not an issue for them because they are going to pay for private schools,” he said. “But if you bring in ... nursing and non-medical positions at the hospitals, K-through-12 public schools is a big issue for them. ... Those folks can’t afford to send their kids to private school, and if they do they have to give up something to make that happen. Those are the things I hear.

“Right or wrong, the perception is that K-through-12 schools are not doing very well. We are working on it, ... but things haven’t changed yet.”

WHERE’S THE DISCONNECT?

Robert “Robbo” Hatcher Jr., president of H2 Capital Inc. and chairman of Mercer business school’s board of visitors, said the survey gives “timely insights into the local business climate.”

“The results of this survey reflect that the greatest local barrier to growth continues to be workforce related -- indicating a disconnect between the available labor pool and the skills needed most by local employers,” he said in a release.

Respondents represented a variety in company size, geography and industry. Most had fewer than 10 employees, which accounted for 31 percent of the total number of respondents. The survey included results from a variety of industries led by retail, professional and technical services, health care and social assistance, and finance and insurance.

A majority of the businesses were located in Bibb (56 percent), Houston (22 percent) and Monroe (19 percent) counties.

Pat Topping, senior vice president of the Macon Economic Development Commission, agreed that workforce issues continue to be “the major criteria for new and existing growth.”

“MEDC is working with all our workforce partners to identify current needs as well as future workforce needs to assist our businesses and industries to take advantage of growth opportunities as the economy continues to improve,” he said.

But the commission has seen a steady increase in new projects and existing business and industry expansions, he said.

“Our market activity is up 20 percent over the last two years,” he said. “The Macon market has added almost 1,000 jobs in the last 12 months, and with the new and expansions underway, we could add 1,500 jobs by this time next year.”

In June, First Quality Packaging Solutions announced it chose Macon for its “flagship manufacturing facility,” which would bring about 115 new jobs to the plant that will design, develop and manufacture plastic packaging for the retail food, food service and health care markets. The company employed about 280 workers in June.

Last month, The Boeing Co. announced plans to invest $81.7 million to convert its existing military facility in Macon to a commercial manufacturing plant, creating about 200 jobs.

Also last month, Sandler AG, a German-based textile supplier, announced it plans to open its first North American facility in a speculative building on 100 acres in Perry. The family-owned business would employ more than 140 workers.

And long in the works, Kumho Tire is just months away from opening its $424 million manufacturing plant in Bibb County and is expected to employ up to 450 workers. Production is expected to begin in early 2016.

Dyer doesn’t think the labor situation in Bibb County or Middle Georgia is any different in other locations. The chamber recently led a group trip from Macon to Nashville, Tennessee.

“They’ve got the same issue there with their workforce, ... and Nashville is a great place to live,” he said. “They are doing great with companies moving there and job creation, but they’ve got more jobs than they can fill. It’s an issue for them, too.”

To contact writer Linda S. Morris, call 744-4223 or follow her on Twitter @MidGaBiz.

This story was originally published October 11, 2015 at 10:00 PM.