Talent Talk: A Manufacturing Boom Is Coming, but Where Are the Workers?
US manufacturers are expected to create 3.8 million jobs over the next decade, but about half of them will be left unfilled, according to a study.
July 22, 2024
For the past year or so Talent Talk has been bullish on the manufacturing sector. Our reasons included the coming of industry 4.0, the hundreds of billions of dollars being invested into building a record number of new factories, and a significant reshoring effort.
Fed rate cuts coming.
I learned a long time ago from economists, investors, and other prognosticators that they are never wrong, just early in being right. So, I remain convinced that manufacturing is ready to shine. Talent Talk was an early adopter of this viewpoint, too early as it turns out. We underestimated the impact that higher interest rates for an extended period would present to a capital-sensitive industry, but the markets now are virtually certain that the Federal Reserve will begin a series of rate cuts in September.
Manufacturing construction spending at record high.
A recent joint study by the Manufacturing Institute and consulting firm Deloitte confirmed that the United States has been building new manufacturing facilities at an astounding pace, with the total number rising 11% in a roughly four-year period since early 2019. Moreover, manufacturing construction spending, which we called “eye-popping” last year, reached another record high this year and has tripled over the past four years.
The report went on to say that investment from both domestic and foreign manufacturers in — or in proximity of — the United States, commonly referred to as reshoring and near-shoring, continues to be a priority for companies in a desire to de-risk the supply chain.
A US manufacturing renaissance.
This coming growth in manufacturing will create 3.8 million jobs over the next decade, according to the study. Yet, it estimates that current workforce availability will allow only about half of those jobs to be filled, leaving 1.9 million unfilled.
It might seem like the hot labor market has cooled a bit — and it has — but that could prove to be a temporary phenomenon. Even in this market, 65% of manufacturers said that attracting and retaining talent is their primary business challenge, with a specific unmet demand for technical roles.
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