Manufacturing output, productivity, capital investment and jobs are all on the rise as the US creeps out of recession according to this week's Wall St. Journal. As worldwide demand for goods increases, especially in Asia, some US manufacturers are once again investing in capacity in the US and using their overseas capacity to fill overseas demand. With suitable government support, cooperation between labor and management and a return to teaching our young people necessary technical skills, perhaps we will see a sustainable increase in US manufacturing output and employment. Packagers should anticipate the impact that this may have on them.Last year manufacturing employment was up 1.2% and the projections for this year are a bit more than twice that number. The fact that these jobs pay on average twice what a service job pays, makes this doubly good news for the economy as more dollars per job will be in circulation.The use of technology to fuel this resurgence is apparent in the numbers. Output is growing at more than twice the rate of growth in labor hours. Industries that have been difficult to automate, such as furniture making, are continuing to lose jobs. Industries that have been automated for a while, such as transportation equipment, are gaining jobs. Industries that are in the process of applying automation, such as food, are holding their own, increasing output without adding jobs.This news coupled with workforce and education topics that I've been writing about on this blog point to some implications for packagers and packaging machine manufacturers. Growth in the durable goods sector will create demand for both assemblers and more highly skilled maintenance workers and operators. I would not expect to see growth in unskilled jobs. Those manufacturers who rely on unskilled labor to produce or package their products will find themselves at increasing competitive disadvantage, resulting in a net decline in low-skill jobs. If you or someone you know is in a low-skill job, you need to get back to school.The middle third of packagers who are still not fully automated will face stiff competition for their smaller but more highly skilled workforce. Even as we are just entering the recovery, demand for skilled maintenance staff is exceeding supply. Workers for less skilled jobs as assemblers and operators are more readily available. In the short term, manufacturing may benefit from the lack of activity in construction, with some of this workforce making the transition to factory jobs. But in the long run, these workers will migrate toward the automotive and other higher paying sectors, creating a supply problem for packagers who may be expecting to pay a bit less. Machine manufacturers will see similar trends.If you expect to see any growth in your company or if you expect to become more automated, the time is NOW to link your technology plan and you HR plan and to begin to execute them both to insure that you have the workforce necessary for success. If you intend to automate without these plans in place and linked, my recommendation is don't. You won't get the results that you expect.The news about US manufacturing is good. Prepare now so that the news is good for your company too!
