Recent data is showing some encouraging signs for manufacturing employment. The United States has recovered all production jobs lost during the pandemic and then some, and there is ample reason for this upward trend to persist.

By way of perspective, manufacturing employment in the United States reached its all-time high in June 1979 at almost 19.6 million. After falling sharply during the recession of the early 1980s, the number of jobs in the sector bounced around about 17 to 18 million for decades.

The early 2000s brought another steep drop during the dot-com downturn. Things leveled off for a few years before dropping again during the Great Recession. The bottom was reached in early 2010, with manufacturing employment of less than 11.5 million. Almost one third of US manufacturing jobs had been lost in just a decade between 2000 and 2010 alone, and employment in the sector hadn’t been that low since the 1940s.

We began to see slow, but fairly steady growth after that time. By February 2020 (just before the pandemic), almost 12.8 million people worked in the manufacturing sector, a total which fell precipitously to 11.4 million a couple of months later and wiped out a decade of gains. We topped the pre-COVID-19 level again in June 2022, however, and the positive trajectory continues.

It is important to note that part of what has been going on for decades is the ability to make more stuff with fewer people. Automation and advanced manufacturing techniques have totally revamped the process. Moreover, the goods being produced have shifted toward higher value added categories, and output is much higher than in the past (approximately doubling in the past 25 years). 

The recent pattern is encouraging for multiple reasons. One is that it’s due to both smaller, entrepreneurial firms doing well and larger firms shifting focus for certain types of operations back to the United States. This “reshoring” reflects the realization that it makes sense to have some domestic production even if it’s not always the lowest cost short-term option. The pandemic illustrated that, during difficult times, domestic production of key goods can be crucial. For example, the capacity to produce certain health products in the United States could help ensure we have the things we need in emergency situations. Similarly, tens of billions are being invested in semiconductor plants, as the risks associated with not having that capability have been dramatically demonstrated.

The pandemic escalated an ongoing trend toward considering a longer-term strategic horizon. Today’s lowest cost option might be trouble for sustainability down the road. I think we’ll continue to see companies diversify their supply network, with one beneficial result being more manufacturing output and jobs staying close to home. Stay safe!

Editor’s Note: The above guest column was penned by Dr. M. Ray Perryman, president and CEO of The Perryman Group (www.perrymangroup.com). The Perryman Group has served the needs of more than 2,500 clients over the past four decades. The above column appears in The Rio Grande Guardian with the permission of the author. Perryman can be reached by email via: [email protected].


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