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Manufacturers Optimistic but Still Reluctant to Hire

Posted August 20, 2013 & filed under References

Manufacturers Optimistic but Still Reluctant to Hire

As the summer begins to wind down and we creep into the later portion of the year, manufacturers are overly optimistic on their outlook of the market despite a lingering reluctance to hire.

According to new reports, which combine interviews from 60 U.S. based manufacturers and industrial businesses, the amount of manufacturers who are optimistic about the next 12 months of the U.S. economy rose 8% in the past quarter, topping off at 63%. Naturally, uncertainty fell to a low of 30%, and pessimism in economic trends has plummeted to 7%.

These numbers could very well be the result of an increase in manufacturing production. According to a report released by the Institute for Supply Management, production increased in July at the fastest rate in over 2 years. As a result, the index rose from 50.9 to 55.4, a 4.5% increase overall.

Additionally, an Industry Market Barometer (IMB) survey of more than 1,200 small, mid-sized, and large manufacturers found that 55% of those surveyed reported growth in 2012, and 63% were predicted to experience positive numbers this year. These trends suggest that the manufacturing industry has begun to rebound and will continue to grow in the coming months.

But why are manufacturers still reluctant to hire despite the good news being released month after month? Although optimism and production are up, manufacturers that plan to hire more staff have dropped from 58% in Q4 of 2012 to 45% in Q1 of 2013, dropping yet again in Q2 to 42%.

Some suggest that increased productivity and optimism in the market, combined with a reluctance to hire, demonstrates the lack of skilled workers available to fill the jobs that manufacturers are prepared to offer. Many manufacturers even admit that less than 30% of their workforce fall into the category of “young workers” (ages 18-30), and are holding out for schools to churn out a talented pool of skilled STEM workers in the coming years. For now, it seems that they will be holding off on increasing their staffs unless absolutely necessary.

By Kevin Withers

Image courtesy of ninahale via Flickr