Thirty-seven percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, unchanged from February and the lowest reading since January 2021. Thirty-one percent have openings for skilled workers (down 1 point) and 14 percent have openings for unskilled labor (up 2 points). The difficulty in filling open positions is particularly acute in the transportation, construction, and services sectors. Job openings in construction were down 9 points from last month. Openings were the lowest in the finance and wholesale sectors. Owners’ plans to fill open positions continue to slow, with a seasonally adjusted net 11 percent planning to create new jobs in the next three months, down 1 point from February and the lowest level since May 2020. Overall, 56 percent reported hiring or trying to hire in March, unchanged from February. Forty-eight percent (86 percent of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill (down 3 points). Twenty-nine percent of owners reported few qualified applicants for their open positions (up 4 points) and 19 percent reported none (down 7 points). Reports of labor quality as the single most important problem for business owners increased 2 points to 18 percent. Labor cost reported as the single most important problem for business owners decreased 1 point to 10 percent.

Fifty-six percent reported capital outlays in the last six months, up 2 points from February. Of those making expenditures, 38 percent reported spending on new equipment (up 3 points), 24 percent acquired vehicles (up 1 point), and 17 percent improved or expanded facilities (up 2 points). Ten percent spent money on new fixtures and furniture (down 2 points) and 5 percent acquired new buildings or land for expansion (down 1 point). Twenty percent (seasonally adjusted) plan capital outlays in the next few months, down 1 point from February. A more positive view of the future economy and economic policy would help stimulate longer term investment spending, but currently, owners’ views about the future are not supportive and financing costs are very high. Investment is needed to address labor supply chain problems which still persist in the current environment.

The net percent of owners raising average selling prices rose 7 points from February to a net 28 percent seasonally adjusted. Twenty-five percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), up 2 points from February. Unadjusted, 13 percent (down 3 points) reported lower average selling prices and 43 percent (up 6 points) reported higher average prices. Price hikes were most frequent in the finance (61 percent higher, 10 percent lower), retail (54 percent higher, 6 percent lower), construction (51 percent higher, 4 percent lower), wholesale (50 percent higher, 17 percent lower), and transportation (44 percent higher, 0 percent lower) sectors. Seasonally adjusted, a net 33 percent plan price hikes in March (up 3 points).

Two percent of owners reported that all their borrowing needs were not satisfied, down 1 point. Twenty-seven percent reported all credit needs met (up 3 points) and 59 percent said they were not interested in a loan (down 2 points). A net 8 percent reported their last loan was harder to get than in previous attempts (up 1 point). Four percent reported that financing was their top business problem (unchanged). A net 17 percent of owners reported paying a higher rate on their most recent loan, up 1 point from February. The average rate paid on short maturity loans was 9.8 percent, up by 1.1 points from last month. Twenty-eight percent of all owners reported borrowing on a regular basis, up 3 points from the previous month.

Seasonally adjusted, a net 38 percent reported raising compensation, up 3 points from February’s lowest reading since May 2021. A seasonally adjusted net 21 percent plan to raise compensation in the next three months, up 2 points from February. Ten percent cited labor costs as their top business problem, down 1 point from February and only 3 points below the highest reading of 13 percent reached in December 2021. Eighteen percent said that labor quality was their top business problem (up 2 points). The frequency of reports of positive profit trends was a net negative 29 percent (seasonally adjusted), up 2 points from February. Among owners reporting lower profits, 29 percent blamed weaker sales, 17 percent blamed the rise in the cost of materials, 13 percent cited usual seasonal change, and 12 percent cited price change. For owners reporting higher profits, 53 percent credited sales volumes, 23 percent cited usual seasonal change, and 12 percent cited higher selling prices.

A net negative 10 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up 3 points from February. The net percent of owners expecting higher real sales volumes deteriorated 8 points to a net negative 18 percent (seasonally adjusted). The net percent of owners reporting inventory gains fell 6 points to a net negative 7 percent. Not seasonally adjusted, 12 percent reported increases in stocks (down 1 point) and 22 percent reported reductions (unchanged). A net negative 5 percent (seasonally adjusted) of owners viewed current inventory stocks as “too low” (e.g. inventories are too large) in March, down 1 point from February. A net negative 7 percent (seasonally adjusted) of owners plan inventory investment in the coming months, unchanged from February.