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Business management guru Tom Peters once wrote, “If you’re not confused, you’re not paying attention.” Well, American manufacturing leaders are paying attention to the increasingly complex circumstances they face—and they are quite confused. The latest data on manufacturing are mystifying in their extremes. Where is the light at the end of the tunnel? Following are a selection of numbers that help highlight the current state of U.S. manufacturing.
44.2. The median age of manufacturer worker in the U.S. today. While that’s comfortably within the range of other sectors—the median age of workers in retail is 37.7 years while the median age of truckers is 46.4–the number continues to increase. According to SHRM, the median age of manufacturing workers in 2000 was 40.5. This is part of the challenge we face: with 2.5 million Boomers preparing to drop out of the manufacturing workforce in the coming years, the need for new talent becomes more pressing.
100.9. The current level of manufacturing production on the St. Louis Federal Reserve’s industrial production index (2017 = 100). Interestingly, the collapse of manufacturing during the Great Recession was so dramatic that output in this country has yet to reach the pre-recession index level of 106.5, reached in December 2007. The index climbed to 99 in February 2020, only to watch that Sisyphean boulder tumble back down the hill when the pandemic struck. Despite extraordinary demand, current supply chain disruptions and talent shortages will likely keep manufacturing output under its pre-recession level through the rest of 2022.
308,000. The number of manufacturing workers who left their companies in December 2021 alone (whether due to retirement or as part of the Great Reshuffling). While that number was offset by 433,000 hires in December, the so-called monthly “quit rate” was above-average throughout 2021—including 294,000 departures in November, 298,000 in October, and 324,000 in September. This compares to a number hovering between 200,000 and 225,000 in the three years prior to the pandemic. In combination with other data (see below), it shows how talent retention has become as much of a problem as talent recruitment.
856,000. The number of manufacturing job openings in December 2021. This has been the biggest fundamental challenge facing manufacturers over the past 15 years. Yet, relatively speaking, the 6.4% rate in openings is middle-of-the-pack for a pandemic-stricken economy. The job open rate is 6.8% for the entire private sector—and 9.9% for leisure and hospitality.
3,020,000. The number of industrial robots worldwide in 2020, which is double the number from 2014. This is obviously related to the previous data points, as businesses start turning to robotic automation for some roles historically relegated to humans. This is most rapidly occurring in nations with aging workforces: South Korea has the most “robot-dense” nation in the world, with 932 per 10,000 workers in 2020. That is followed by Singapore (605 per 10,000 workers), Japan (390), Germany (371), Sweden (289), Hong Kong (275) and the United States (255). Even though China has the greatest overall number of industrial robots, it has only 246 robots per 10,000 employees.
12,559,000. The number of manufacturing employees in the U.S. as of January 2022, according to the Bureau of Labor Statistics. That’s 8.4% of total U.S. employment. Here’s the problem: the government’s definition of manufacturing is pretty narrow because data is collected not at the firm level, but at the establishment level—which in manufacturing means at the plant. This means manufacturing employees not employed at a plant are counted elsewhere. For example, employees at corporate offices are classified as “management of a business enterprise” (a service industry). R&D centers are also counted as a service. Warehouses for wholesale trade and centralized logistics for transportation are also counted separately. Clearly, manufacturing’s workforce footprint is much larger than that suggested by the data.
79,400,000. The number of global vehicle sales last year, according to IHS Markit. This was 3% higher than sales in 2020, but due to continuing supply chain disruptions—particularly with semiconductor chips—a solid 13% under 2019 sales and 18% below 2018 sales. This is an example of how the current supply chain crisis has taken a toll on the sector and stymied the sector’s re-emergence from the pandemic. The United States had 15.07 million vehicle sales last year, which similarly was about 3% higher year-over-year, but similarly well below pre-pandemic levels. The supply chain challenge and chip shortage are expected to remain a critical issue for manufacturers through 2022.
The issues addressed in these data points can feel overwhelming for manufacturing leaders. In many ways, it feels like the challenges they expected have accelerated and are all pressing in at the same time. Companies continue to showcase resilience and creativity to solve issues from supply chain to talent to continue their large contribution to the U.S. economic value chain.
Stephen Gold is president and CEO, Manufacturers Alliance.