The US manufacturing sector is booming again, but advancements in factory automation are outpacing the supply of skilled workers.
The drop in manufacturing employment in the US over the past two decades is often seen as the sector’s decline. Blame is typically assigned to global trade, particularly with China. Economic studies, however, point to investments in automation. Output and productivity in America’s manufacturing sector are actually quite high: Data from the Federal Reserve show that output has more than doubled since the 1980s. Between 2002 and 2015, output per labour-hour rose by 47%. More recently, the Institute for Supply Management reported that manufacturing activity hit a 13-year high in September 2017. Of the country’s 18 manufacturing industries, 17 reported growth.
In a 2016 survey of global chief executives, Deloitte found that CEOs expect US manufacturing to outcompete China’s in only a few years. The most technologically advanced are seeing the most growth. In Connecticut, for example, defence contractor General Dynamics Electric Boat won a $5.1 billion contract in September and expects to hire 15,000 to 20,000 workers by 2030. Pratt & Whitney, a division of United Technologies that makes jet engines, says that over the next decade it plans to hire some 8,000 workers in the state.
Continuing these growth trends hinges on the supply of skilled workers, however. The Manufacturing Institute, in collaboration with Deloitte, estimates that nearly 3.5 million US manufacturing jobs will be added by 2025. They also report that some 2 million could go unfilled.
Measures are being taken to address the manufacturing talent gap. In 2014, manufacturers, universities and federal agencies formed a network of partnerships called the National Network for Manufacturing Innovation. It focuses on developing and promoting the adoption of advanced manufacturing technologies and techniques, such as 3D printing and digital manufacturing, as well as helping to train workers. At the state level, policymakers, educators and companies are promoting training programmes. Schools and factories are being upgraded.
According to The Economist, “It will take more than a few enterprising colleges, and local partnerships with companies, to tackle America’s yawning skills gap, but these are a start.” Having a variety of initiatives in play should allow policymakers and manufacturers to determine what works best, and replicate these successes. Technological progress will likely continue to keep manufacturing jobs from returning to past highs; however with a more robust pipeline of workers with the skill to play a role in automated manufacturing systems, there is potential to mimic the glory days – or at least come close.