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Businesses expect to pay higher wages for new workers

Posted: February 19, 2014 - 1:26pm

ATLANTA — Businesses in the Southeast expect to be hiring, and they’re predicting they’ll have to pay more to attract new workers.

As a result, they predict inflation will clock in at 2 percent over the next 12 months, according to a survey released by the Federal Reserve Bank of Atlanta. The survey of 200 businesses was conducted Feb. 3-7.

The companies report that labor costs are 1.8 percent higher than this time last year, on average.

“About 65 percent of respondents expect labor costs to put moderate or strong upward pressure on their prices over the next 12 months,” the Fed wrote in its release.

When asked about hiring, about 45 percent of the companies expect to add jobs over the coming year while just 14 percent plan reductions. The remaining 42 percent foresee no payroll changes ahead.

Adding the new hires and subtracting the forecast layoffs nets a 1.8 percent employment rate for the Southeast.

When it comes to current conditions, 49 percent of companies surveyed said they are enjoying sales at or above “normal” levels, the same portion as in January’s survey. Profit margins, though, showed slight improvement because 48 percent reported profit gains in the February poll compared to 45 percent the previous month.

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