U.S. manufacturers’ hiring pace remained in positive territory in September with a net increase of 22,000 in manufacturing payrolls from August, according to data released Friday by the Bureau of Labor Statistics. The sector’s pace of hiring has slowed since its recent peak in April of this year at 61,000. April also saw the peak of open manufacturing jobs at 1.02 million, which dropped to 795,000 at the end of August.
While these jobs numbers are positive, a comparison between pre-pandemic manufacturing job openings and current levels indicates that such jobs will likely remain unfilled, even in a recession. Open manufacturing job positions, while off their peak, remain nearly double their pre-pandemic levels—which is especially significant given that there was already a manufacturing job shortage before the pandemic. Average open manufacturing jobs before the pandemic were around 450,000. During the two-month pandemic recession in 2020, open jobs averaged 310,000, only a slight dip, indicating that during a recession the bottom is likely somewhere near that figure.
The shortage can only be filled by incorporating more technology alongside workers and replacing hard-to-fill positions that involve repetitive work.
The shortage can only be filled by incorporating more technology alongside workers and replacing hard-to-fill positions that involve repetitive work.
If the United States is heading into a recession, manufacturing employment figures suggest it may not be too far off. If we see open manufacturing jobs at or below that figure coupled with negative manufacturing payrolls, then it is a clear sign we are at the bottom.
To be sure, surveys conducted in April of this year by the Manufacturing Leadership Council, an organization whose mission it is to digitize U.S. manufacturing, showed that all 200 senior executives surveyed intended to increase investments in the next two years into advanced analytics, sensors, Internet of Things technologies, artificial intelligence and machine learning, automated guided vehicles, collaborative robotics, edge computing, augmented and virtual reality and wearable technologies.
The United States will not hire its way out of the shortage of manufacturing jobs the market needs. Technological innovation may not fully solve the problem in the near term, but there are latent efficiencies businesses will gain through their investments to help stem the U.S. manufacturing labor shortage.
