Manufacturing Economy and Hiring Forecasts

In a crazy week for the economy, the Department of Labor reported the U.S. unemployment rate jumped to near a three-year high of 4.3% in July.  A significant slowdown in hiring heightens fears of potentially making the economy vulnerable to a recession.

Likewise, the manufacturing industry sunk deeper into economic contraction last month, weighed down by political uncertainty and unwaveringly high interest rates. Much of the drop was due to a decrease in new orders for the first time in three months amid a “general slowdown” in demand persisting throughout the first half of 2024.

The upside is that many firms are expecting the weakness to be temporary, linked to paused spending and investment ahead of the Presidential Election, even though expectations for output in one year’s time remain subdued by historical standards.

Amid the slowdown, hiring has been pushed to the back burner for many companies. HR pros say they’re now more focused on “maximizing value within budgetary constraints” and meeting higher expectations for their spending choices.

Continuing trends observed during the second halves of 2022 and 2023, about 60% of hiring managers said they plan to increase the number of employees during the last half of 2024, while 32% said they would maintain status quo and 6% said they would be reducing employee count, “on par with previous waves,” the report said.

In a survey of 1,003 U.S. hiring decision-makers, companies that plan to add to their workforce cited increased volumes of work and newly created positions.

This bifurcation may also simply reflect that “manufacturing” includes so many different sectors it may not even be a useful categorization. Biological products, audio and video equipment, aerospace, renewable energy, and medical device manufacturing are some of the nation’s fastest growing industries. At the same time, apparel, printing, furniture, and tobacco manufacturing are some of the most rapidly declining industries in the US. 

More than ever, our capacity to reskill and upskill workers will be crucial to re-shore more quality manufacturing jobs successfully. Supporting employment in these critical sectors must include expanding access, education, and investing in workers as they transition to new industries.