Featured Image

Automation Helps, but It’s Still a Workers’ Market

Given current economic conditions compared to where they were forecast to be at this point, this article will look at how the manufacturing employment landscape has changed and what it has meant for orders of manufacturing technology ...
Jun 06, 2023

In an article appearing last fall, AMT – The Association For Manufacturing Technology looked at the number of job openings in manufacturing relative to the rest of the economy. Based on the high number of open positions relative to recent history and comparing the relative trends following a recession, we concluded that “should the economy fall into recession, the manufacturing sector may emerge in a better position than it started for the first time in a generation.”

Six months after the publication of that article, the predicted recession has yet to appear in the data, and many economists have revised their predictions for the onset of an economic decline to begin in late 2023 or early 2024. Given current economic conditions compared to where they were forecast to be at this point, this article will look at how the manufacturing employment landscape has changed and what it has meant for orders of manufacturing technology.

Durable Jobs

At the time of the last article, there were about two open jobs for every unemployed person seeking employment. That number has come down marginally since then but is still at historically elevated levels, averaging 1.8 open positions per unemployed worker over the last six months and only dropping as low as 1.67 over that time span. The labor force participation rate has come up in recent months, which may be one of the reasons the ratio of open positions to available workers has declined. Despite several months of improvement, the participation rate is still over 1% below the pre-pandemic level, which could account for as many as 2 million workers absent from the labor market.

Looking specifically at manufacturing employment, the share of all job openings for the manufacturing sector has moderated back toward its historical average, although remaining slightly elevated. What has become an interesting trend is the elevated share of manufacturing job openings, which come specifically from manufacturers of durable goods. Since 2001, durable goods manufacturers typically represent just over 60% of all manufacturing job openings, and in recent months, that share has been about 14% above average.

Automation on the Rise

The U.S. Manufacturing Technology Orders Report found only a moderate correlation in the past between the number of job openings for durable goods manufacturers and either the number of units or total value of manufacturing technology ordered. Looking from January 2020 to the present, the correlation for the number of units ordered has remained moderately positive; however, the correlation between the value of the machinery and the number of open positions has become very strongly positive. In a previous article, we explored the increased demand for automation, and this correlation seems to offer more evidence that, in the face of employment challenges, manufacturers are relying on increasingly more efficient machines in order to meet their customers’ needs.

Despite the massive buildup of machinery and accompanying automation over the last two years, manufacturers of durable goods are still operating under abnormally tight conditions. Capacity utilization for manufacturers of durable goods has been coming down since hitting a post-recession peak in April 2022; however, it has averaged 84.5% over the last six months, well above the average of 76.1% over the five-year period prior to the COVID-19 recession.

In-Demand Workforce

Since the last exploration of employment conditions in the manufacturing sector, some measures have returned to or been trending toward their historical averages, while others have continued to show a persistently tight labor market. Tracking the demand for employees from manufacturers of durable goods as well as their capacity utilization can offer insights into the likely direction of the manufacturing technology industry. While some of the underlying conditions have changed and the outlook is a little different, the conclusion of six months ago still stands: The scale of the present opportunity in manufacturing has not been seen in a generation, and the conditions are such that experience in the manufacturing sector will be one of the most in-demand skills of the post-COVID economy.

To keep track of the market for manufacturing technology in real time, you can read the USMTO press release, which comes out the second Monday of each month. The release can be found both at AMTonline.org and USMTO.com. 

If you have any questions about this information, please contact Chris at cchidzik@AMTonline.org.

Christopher Chidzik
Principal Economist
Recent smartforce News
A small manufacturer in North Carolina doesn’t have a labor shortage problem because it taps into an often-overlooked workforce: the visually impaired. Learn how IFB Solutions trains and employs people who are blind for manufacturing and assembly work.
Today’s manufacturing technology makes it easier for companies to hire more people with disabilities, a talent pool of more than 10.7 million people. Learn how GenMet reduced barriers for people in wheelchairs and with intellectual disabilities.
AMT – The Association For Manufacturing Technology and SME announced a strategic partnership today, making bigger strides together toward solving North America’s manufacturing workforce challenges.
Meet more women who are making manufacturing move. This time, we’re focusing on additive manufacturing and meeting women who fell into the industry by chance and are now changing what’s achievable.
The 2023 MFG Meeting provided a unique opportunity for manufacturing technology companies to address the industry-wide concern about the skills gap, education, while talent experts discussed the importance of filling and retaining skilled labor through...
Similar News
By Christopher Chidzik | Apr 09, 2024

Orders of manufacturing technology, measured by the U.S. Manufacturing Technology Orders Report published by AMT – The Association For Manufacturing Technology, totaled $343.3 million in February 2024.

5 min
By Tim Shinbara | Mar 18, 2024

Discover how MTConnect bridges the innovation lag between consumer tech and manufacturing. As a unifying open-source standard, MTConnect streamlines machine communications and fuels emerging tools like digital twins.

5 min
By Christopher Chidzik | Mar 12, 2024

Orders of manufacturing technology, measured by the U.S. Manufacturing Technology Orders Report published by AMT, totaled $338 million in January 2024, a 31% decline from December and a 3.7% decline from January 2023.

5 min