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The State of Manufacturing: Struggling but Resilient

With automation and reshoring gaining interest during COVID-19, there is also a growing demand for skilled workers.

The most recent installment of the Thomas Industrial survey of North American manufacturers reveals a resilient sector that is still in hiring mode as it struggles to close its prolonged skilled-worker gap. Thomas surveyed 746 North American manufacturing and industrial suppliers to identify the major trends stemming from the global pandemic.

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The recent survey of North American manufacturers by Thomas shows a sector still hiring and getting ready to bring production back home.

The survey indicated that 91% of manufacturers are confident the industry will recover. Even so, many predict it will take months to several years to earn back the lost revenue due to the pandemic. The report noted that manufacturing and industrial companies continue to demonstrate remarkable innovation in overcoming the challenges brought on by COVID-19. Manufacturers are turning more toward automation and revealing greater ability to pivot in their supply chains. They’re in hiring mode and they’re showing an accelerated interest in reshoring.   

Key Findings

The Impact of Automation: Apparently most manufacturers believe they’re coping well during this pandemic. More than 50% of the respondents feel that they are meeting or exceeding industry standards on automation processes. The top three automation technologies that manufacturers are most interested in over the next 12 months are production performance (55%), product testing and quality assurance (48%), and process control (46%). Other benefits manufacturers are seeing from automation in the midst of COVID-19: Augmented reality tools are getting used to avoid sending technicians in affected areas; automation is helping manufacturers speed up the time it takes to finish products.

Reshoring Trends: A surprising 69% of respondents report that they are extremely likely to bring production and sourcing back to North America in the future, with Agricultural, Energy/Utilities, and Food & Beverage sectors leading that interest. The top products North American manufacturers are looking to source domestically include metals (15%), machining tools and parts (13%), fabricated materials (13%), and personal protective equipment (12%).

Future of Work and Skilled Labor: More than one in three companies report they are actively hiring. While 52% of companies have continued apprenticeship programs during the pandemic, 40% report they have paused their programs in place and only 3% have ended it. The survey also suggests that reshoring will ultimately lead to an increase in high paying jobs, growing demand for skilled jobs, and the need for an exponential number of support jobs.

Job Opportunities Persist in Manufacturing

Prior to the pandemic, manufacturers were struggling to find skilled workers. This demand has only grown during COVID-19, even with soaring unemployment. “Among the most remarkable aspects of the survey is that even amidst the sweeping job insecurity throughout our nation, the manufacturing sector continues to offer job growth opportunities,” Tony Uphoff, president and CEO of Thomas, told Design News. “According to our survey data, 38% of manufacturing and industrial companies are actively hiring, up from 31% reported in our April 2020 survey.”

Many manufacturers are turning to apprenticeships to help solve labor gaps. “It was great to see that half of the companies that offer apprenticeships continued to do so during the pandemic,” said Uphoff. “These programs are critical in helping to address the skills gap and labor shortage.”

In an industry with a significant skills gap, apprenticeships are proving helpful. “They offer on-the-job training and provide an opportunity for apprentices to develop skills for careers in a variety of sectors—including but not limited to advanced manufacturing, IT, and healthcare,” said Uphoff. “Manufacturers are mostly seeking apprenticeship candidates who are driven, collaborative, dedicated, and demonstrate a willingness to learn.”

Automation Technology is a Favored Solution

Uphoff noted that the overwhelming number of manufacturers still see a bright future for the industry. “Although the impact of COVID-19 is undeniable, it comes as no surprise that 91% of respondents report that they believe North America will recover from the pandemic. Efforts to drive industry forward focus, in part, around implementation of automation technologies,” said Uphoff. “A hearty 55% of manufacturers are interested in investing in production performance. Those doing product testing and quality assurance come in at 48%, and process control is at 46%.”

Overcoming stresses related to COVID-19 is proving the overall strength of North American manufacturing. “In addition to the efforts to accelerate reshoring, utilize apprenticeships, and increase and diversify supply chains, manufacturing is proving to be among the most innovative and resilient sectors as it continues to adapt to challenges brought upon by the pandemic.”

Reshoring Trend Gains Steam

For a variety of reasons, reshoring was already gaining interest prior to the pandemic. The survey shows that interest just keeps growing. “While we expect reshoring efforts to continue to accelerate post-pandemic, reshoring has in fact been happening for the better part of the last decade, and we expect to see this trend continue,” said Uphoff. “According to our survey, 69% of respondents report that they are extremely likely to bring production and sourcing back to North America in the future, with the agricultural, energy and utilities, and food and beverage sectors leading that interest.”

Reshoring will put even more pressure on the need for skilled manufacturing workers. It will also prompt demand for jobs among manufacturing suppliers. The good news is that these will be well-paying jobs. “Ultimately, reshoring comes at a great benefit to industry and results in an increase in high-paying jobs, a growing demand for skilled jobs, and the need for an exponential number of support jobs,” said Uphoff.

Rob Spiegel has covered automation and control for 19 years, 17 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cybersecurity. For 10 years, he was the owner and publisher of the food magazine Chile Pepper.

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