Based on unemployment data from the U.S. government and a forecast from the Institute for Supply Management (ISM), the employment outlook for 2014 appears positive. But where are those jobs coming from?
Some of them will be in manufacturing, said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee. “On the manufacturing side, companies have done a lot of work [in automation] which has produced some benefits from the equipment standpoint, but at some point you have to add labor,” he said on a conference call discussing the ISM’s semi-annual economic forecast. “I think that is what is behind the employment numbers.”
Manufacturers have an expectation that employment will increase by 2.4 percent in 2014, the ISM survey reported, while labor and benefit costs are expected to increase an average of 2.3 percent. ISM’s Manufacturing Business Survey Committee members report that manufacturing employment increased 1.7 percent since April 2013, and forecast that employment will increase, on average, 2.4 percent for the full year of 2014.
Thirty-eight percent of respondents expect employment to be 9.9 percent higher in 2014, while 14 percent predict employment to be lower by 9.8 percent. The remaining 48 percent of respondents expect their employment levels to be unchanged in 2014.
The 14 industries predicting increases in employment in 2014 — listed in order — are: textile mills; wood products; furniture and related products; plastics and rubber products; food, beverage and tobacco products; fabricated metal products; chemical products; primary metals; printing and related support activities; machinery; electrical equipment, appliances and components; transportation equipment; computer and electronic products; and paper products.
“The year over year data suggest the global economy is going in the right direction and there is a lot more optimism that the worst is behind us,” said Holcomb.
Executives from the non-manufacturing sector echoed the sentiment. “Companies have been doing more with less and at some point there’s a breaking point,” said Anthony S. Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.
ISM’s Non-Manufacturing Business Survey Committee members report that non-manufacturing employment has increased slightly (0.4 percent) since April 2013. Looking ahead to 2014, they forecast that employment will increase 2.1 percent by the end of 2014. For 2014, 39 percent of respondents expect higher levels of employment, 13 percent anticipate lower levels, and 48 percent expect their employment levels to be unchanged.
The 11 industries anticipating increases in their employment in 2014 — listed in order — are: arts, entertainment and recreation; professional, scientific and technical services; management of companies and support services; retail trade; finance and insurance; other services; wholesale trade; public administration; accommodation and food services; transportation and warehousing; and real estate, rental and leasing.
Nieves admits there is actually a risk of a labor shortage in some segments. “A couple of the non-manufacturing sectors are spotty,” he said. Holcomb noted that even some manufacturing segments, such as textiles, have commented on labor shortages. “I have a sense we can overcome that with training in fairly short order,” Holcomb said. “Going into 2014, manufacturers don’t want to get caught [with a labor shortage.]”