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U.S. Manufacturing Jobs Hit 7-Year High

Posted By Paul Tate, February 09, 2016 at 10:25 AM, in Category: Next-Generation Leadership and the Changing Workforce

Workforce_Pic.jpgWhile some industrial indicators may suggest that the U.S. manufacturing sector is undergoing a tough time right now, the latest report from the U.S. Bureau of Labor Statistics, released Friday, suggests that manufacturers are certainly not letting a few bad months dampen their enthusiasm for investing in talent for the future.

According to the report, U.S. manufacturing companies added a substantial 29,000 new jobs in January this year. That’s the fourth consecutive increase over the last few months and the steepest monthly jobs rise for over a year. 

To put this into some kind of perspective, this 29,000 boost in January compares to a net gain of only 33,000 for the whole of 2015.

But perhaps most importantly, that latest increase has pushed the total number of workers in U.S. manufacturing to 12.4 million – a seven-year high! 

Not since the dark days of the financial recession of the late 2000s have manufacturing payrolls been so healthy.

So what’s going on? While the high dollar and a slowdown in exports are often cited as adding to manufacturing’s woes last year, and the U.S. Purchasing Managers’ Index for December hit a 38-month low, according to industry researchers Market Economics, it seems that recent increases in domestic demand and a rise in new orders are helping to push hiring levels upwards in some key sectors.

Of the 79 manufacturing sectors covered in the new U.S. Labor study, for example, 64 per cent said they were adding workers, particularly in food processing, auto production, chemicals, furnishings and fabricated metals.

As Markit’s PMI report noted earlier this month: “Production volumes were reported to have increased at a solid pace in January, with the rate of expansion accelerating from December’s recent low. Reports from survey respondents cited improved spending patterns, in particular from domestic clients. Reflecting this, latest data pointed to a rebound in new business growth to its fastest for three months.”

The question is what’s next? Is this hiring trend likely to continue into the rest of the year, or have increases in manufacturing jobs reached their peak and will gradually level off in the months to come?

What’s happening at your company? Are you hiring for the future, or still waiting to see how demand develops? And what kinds of manufacturing workers are you looking for – young new talent, experienced professionals, more digital skills?

Tell us what you think the future is for manufacturing workers in our new survey: The Changing Manufacturing Workforce: Click Here to share your views. 

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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My name is Aaron Wiegel, President of Wiegel Tool Works, Inc located in Wood Dale, IL. We are a 75 year old family business serving the metal stamping industry. I am also the treasurer of the Technology and Manufacturing Association located in Schaumburg, IL.

I can tell you from what I see at my personal business and in the local manufacturing community that manufacturing is still booming. So much so that it has caused a real strain in the supply of skilled labor. Simply put, there is not any available in one of the largest tool and die communities in the world. To be perfectly blunt, I see this as a major crisis. Not only can we not fill the multiple job openings my company and the local community have available, we also know that in the next 5-7 years the skilled labor that we do have will start to retire off. To compound the issue, it takes 5 years to train an apprentice to become a journeyman tool maker. I think CEO of Apple Tim Cook said it best on 60 minutes. Feel free to review the clip at https://youtu.be/wdMxrovkpmU.

To help out with this crisis, we are mobilizing forces with local manufacturers to start doing a number of things.

1 Work with local high schools and colleges
2 Donate time and money to these institutions for building up manufacturing labs and improve awareness of careers manufacturers offer
3 Become more active in local and national associations to work on this together rather than trying to solve it on our own. We are small to medium size companies so we do not have the resources the Fords, GMs, Caterpillars, etc have.
4 Develop apprenticeship programs that are certified by the Department of Labor so that we can start to supply the market place with skilled labor before it is too late.

I just hope we are not too late. I see wages rising and poaching of employees occurring. This will drive up costs to the point where our local community of manufacturers will price ourselves right out of the market.

Aaron Wiegel
Wiegel Tool Works, Inc.
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