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Manufacturing Jobs Recover, but Not Everywhere: Manufacturing employment in the U.S. has surpassed pre-pandemic levels, marking the first time since the 1970s that the sector has regained all the jobs it lost in a recession. Nonetheless, its recovery lags behind job growth in other sectors of the economy and masks large regional disparities. Manufacturing employment has not yet rebounded to 2019 levels in nearly half of the states. These include the “Rust Belt” states of Pennsylvania, Ohio, Indiana, Illinois, Michigan, and Wisconsin, in contrast, of the 30 states that have experienced increased manufacturing jobs, just 5 (Florida, Texas, Georgia, Arizona, and Utah) account for nearly two-thirds of all manufacturing jobs created in those states since 2019. During the post-pandemic period, manufacturing growth has also shifted away from rural areas towards small urban counties, which have become the sector’s primary drivers of job creation. Those counties have accounted for 61% of new manufacturing jobs since 2019, while rural manufacturing employment has fallen.
While most manufacturing industries have recovered from their pandemic job losses, only two of them, computer & electronics manufacturing and chemical manufacturing, are growing faster than before the pandemic. Employment in computer & electronics manufacturing has reached its highest level since 2011, aided by enormous growth in construction in this industry. Despite the recent uptick, however, there remain 39% fewer jobs in computer & electronics manufacturing than in the year 2000. The transportation and food manufacturing industries have accounted for the lion’s share of post-pandemic job growth in manufacturing. In contrast, metal manufacturing is struggling. After adding 21,000 jobs from 2015 to 2019, employment in that industry has since fallen by 46,000. Other industries below their pre-pandemic employment levels, including furniture, apparel and textiles, and paper and printing, were already experiencing weak or negative growth throughout the 2010s.
Managing the Talent Gap in Manufacturing: For several years, there has been a pressing talent shortage in the manufacturing industry. Researchers currently predict that the industry will be short 1.9 million jobs by 2033. Bringing more workers to the industry takes a wide range of investments and approaches. It is believed that the following three tactics are making an impact and can continue to push progress as more manufacturers buy in:
- Investing More Heavily in the Next Generation. 10,000 Baby Boomers reach retirement age every day, and there are a lot of them in manufacturing. This necessitates massive outreach to spur young people toward the industry. In that regard, it’s encouraging to see that nine out of 10 manufacturers say they’ve formed at least one partnership to improve job attraction and retention.
Manufacturers must become active participants in educating people at various points of their employment journey, whether they’re still in school or actively on the search for something new. The data shows manufacturers are doing so by partnering with technical colleges (73%), industry associations (58%), universities (48%), state and regional economic development agencies (47%), and K-12 schools (44%). Companies are also increasing their formal apprenticeship or on-the-job training and doing a better job of creating diversity. Over the last two years, more than 2,000 people of color have entered manufacturing.
2. Raising Salaries and Focusing on Culture. 65% of manufacturers say attracting and retaining talent is their primary business challenge. The reasons for that are complex, but the solution can be simple: pay better. Manufacturers are competing with major corporations like Amazon and Target, so high wages are crucial in growing the employee base. Retention is also of great importance, and that’s where culture comes into play. For example, there has been a serious focus on improving workplace culture by manufacturers in Northeast Ohio, where 70% more manufacturing companies showed up on the region’s best places to work list than in 2021.
3. Adopting Advanced Technology. New construction is soaring. According to Deloitte, investments to build or expand facilities were up 37% year-over-year in January 2024, reaching a record $225 billion. These facilities are often equipped with new technologies that provide a path to continued prosperity for the industry in an ultra-competitive global environment. By creating more advanced manufacturing jobs, technology helps to rid the industry of a reputation as dingy and repetitive. It makes the industry more appealing to the smartest and most talented recruits. Also, by implementing new technology, manufacturers get more out of their employment dollars since human workers can accomplish more.
For manufacturers, the talent gap is not going away any time soon. Hiring great people will continue to be at or near the top of every company’s priority list, and it will never be easy. Fortunately, things are moving in the right direction.
Robot Orders Down 8% in First Half of 2024: The North American robotics market saw a decline in both units ordered (down 7.9% to 15,705 units) and revenue (down 6.8% to $982.83 million) during the first half of 2024 compared to the same period in 2023. Despite some bright spots in specific industries, the overall performance reflects a pullback in robotics investments across key areas as a result of economic headwinds faced by manufacturers during the first half of this year.
“Rising inflation and borrowing costs have dampened spending on robotics, with many companies opting to delay major investments,” said Jeff Burnstein, president of the Association for Advancing Automation. “Despite these challenges, the push for operational efficiency and workforce augmentation continues to drive demand for robotics in industries such as food and consumer goods and life sciences, among others. As companies navigate labor shortages and increased production costs, the role of automation is becoming ever more critical in maintaining global competitiveness.”
During the first six months of 2024, the Automotive Components sector declined significantly, recording a 38.8% drop in orders to 3,574 units and a 27.3% decline in revenue to $191.93 million. This downturn suggests component manufacturers pulled back on automation investments, likely due to tighter budgets or softer demand forecasts. The Semiconductor & Electronics/Photonics sector also experience a downturn. Orders fell 40.0% to 603 units, and revenue declined 41.4% to $23.43 million, possibly driven by slower capital spending in semiconductor production due to global supply chain issues and decreased demand.
On the positive side, Food & Consumer Goods reported a strong performance, with orders surging by 85.6% to 1,173 units and revenue rising 56.2% to $62.84 million. This growth reflects the increasing reliance on robotics for efficiency in food processing and packaging as companies seek to address labor shortages and rising costs. The Life Sciences industry was also a bright spot, with 1,007 units ordered, representing a 47.9% increase, and revenue growing by 86.7% to $47.29 million, reinforcing the sector’s ongoing reliance on robotics for efficiency and precision.
Boeing to Lay Off 17,000 Workers: On October 14, Boeing President and CEO Kelly Ortberg announced that the company plans to cut 10% of its workforce, roughly 17,000 employees, in the coming months to preserve cash due to the ongoing workers’ strike. As a result of the cuts, Boeing will not proceed with another round of furloughs. In addition, as part of the multi-pronged cost-cutting plan, the company will also delay its first 777-9 plane delivery to 2026 and 777-8 freighter to 2028, as well as end its 767 freighter production in 2027.
The Society of Professional Engineering Employees in Aerospace, which represents more than 19,000 Boeing employees, has contacted the manufacturer to learn how the layoffs will affect its members. The Society’s contract with Boeing includes a process that gives workers cash severance payments and three months of continued health insurance benefits.
Boeing expects to report another bruising quarter when it releases Q3 results, with operating losses of $1.3 billion and $17.8 billion in revenue, down from $18.1 billion a year ago. The International Association of Machinists and Aerospace Workers District 751 strike, which is now entering its fifth week, is believed to be costing Boeing between $50 million and $150 million a day. The work stoppage is also affecting Boeing’s defense, space, and security business. The portfolio is expected to see a $2 billion loss in Q3 due to higher estimated costs on 2026 production contracts and beyond.
“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view of the work we must do to restore our company,” Ortberg said. The layoffs are one of many changes he has implemented since taking over as CEO in August. According to media reports, the chief executive also ousted Ted Colbert, who had overseen the space and defense division. Steve Parker, the unit’s COO, has temporarily assumed Colbert’s responsibilities while Boeing searches for his replacement.
Manufacturing Industry Performance and Outlook
Production at U.S. factories surged in August amid a rebound in motor vehicle output, but data for the prior month was revised lower, suggesting that manufacturing continued to tread water. According to the Federal Reserve, factory output increased 0.9% after a downwardly revised 0.7% drop in July. Economists polled by Reuters had forecast factory output would rise 0.3% after a previously reported 0.3% decline in July.
Motor vehicle and parts output rose 9.8% in August after dropping 8.9% in July. Durable manufacturing production increased 2.1% after decreasing 1.5% in July. In addition to motor vehicles, there was an improvement in the output of primary metals, electrical equipment, appliances, and components, as well as aerospace and miscellaneous transportation equipment. During the same period, production of miscellaneous durable manufacturing goods fell by 0.9%, and nondurable manufacturing production as a whole slipped by 0.2%.
Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, rose to 78.0% from 77.4% in July but is 1.7% below its 1972–2023 average. The operating rate for the manufacturing sector rose to 77.2% from 76.6% in the prior month. However, it is 1.1% below its long-run average.
Manufacturing, which accounts for 10.3% of the economy, continues to be hamstrung by higher borrowing costs. However, some relief is likely, as the U.S. central bank cut its benchmark interest rate by 50 basis points in September.The manufacturing industry has seen significant change over the past few years, and 2025 promises to be no different. As the industry evolves, facility managers will need to look for ways to support automation, prioritize sustainability, maximize the use of space, and enhance overall efficiency in their operations. The manufacturers that come out ahead will be those that find ways to do more with less while reducing waste. They’ll turn to new technologies and lean production strategies, but they’ll also look for simple, cost-effective ways to be as productive as possible.