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Talent Talk: What the Stunning Jobs Report Means for the Plastics Industry

The tight labor market in the plastics sector has been called “unsustainable.” Then again, the experts underestimated overall job gains 13 times in the last 14 months.

Paul Sturgeon

June 4, 2023

2 Min Read
jobs sheet and magnifying glass
Peter Dazeley/The Image Bank via Getty Images

Last Friday, the Labor Department reported that payrolls in the public and private sectors increased by 339,000 in May, the 29th consecutive month of positive job growth. That is the headline — all that most people will see or care about — but we need to look a bit deeper to understand what is going on, and what it means to the plastics industry.

First, a general observation that illustrates the uncharted waters we are navigating that has even the “smart guys” scratching their heads. The May consensus for new jobs was 190,000, a huge miss and the 13th underestimation by Wall Street in the last 14 months.

Keep that in mind when you hear the experts predicting what will come next. For over a year Talent Talk has explained why the labor market would remain much hotter than anyone was expecting, forcing the Fed to raise rates higher than most were predicting.

Unfortunately, manufacturing has not shared in the job growth in recent months for several reasons, including supply chain imbalances, price instability, and the burden of higher interest rates, which is hitting capital intensive sectors harder.

However, it seems that within the plastics sector the labor market is extremely tight now. A recent report from the Plastics Industry Association showed an unemployment rate in plastics and rubber manufacturing of 0.1% in April. The report concludes that this is unsustainable and must increase, which seems obvious and logical, but very little over the past year has followed logic or been obvious when it comes to the labor market.

Talent Talk’s advice is to continue to use every available opportunity to add to your staff. Manufacturing was one of the first areas to feel a slowdown but promises to be one of the first to benefit at the other end of the cycle. Forbes recently said the manufacturing sector is presenting itself as a modern-day “gold rush.”

We will look further into this in the coming weeks.

 

paul-sturgeon-150.jpgAbout the author

Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].

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