U.S. Manufacturers will Struggle to fill 3 million jobs by 2020

A report from The Boston Consulting Group estimates that the relocation of manufacturing from China, combined with increased U.S. exports, will help create 2 million to 3 million jobs in the U.S., reduce unemployment by 1.5 to 2 percentage points, and lower the nonoil-related merchandise deficit by 25 to 35 percent. However a report from MFG.com, an online sourcing marketplace, warns that American manufacturers might not be able to carry the load.

“There’s a severe shortage of workers,” says Mitch Free, Manufacturing Analyst and CEO of MFG.com. “Indicators are showing good signs; the market is active, reshoring is gaining speed, and there’s a high potential for growth. However, job shops are reporting that they cannot take advantage of this industrial growth because they’re unable to find skilled machinists.”

Job shops produce parts and components for product manufacturers on a contract basis, and include machine shops, plastic molders, metal stampers, die makers, mold makers, extruders and fabricators.

MFG.com surveyed more than 250 American job shops for its “Job Shop Health & Capacity Report.” From the results, Free concludes that reshoring is real and that job shops are benefitting. 40% of job shops reported getting a new contract that was previously sourced to a foreign supplier. The problem is America’s limited supply of skilled workers.

“Job shops are reporting one of their greatest challenges is finding skilled employees,” Free added. “Sourcing professionals have reported that they want to reshore more work but are having a tough time finding high quality suppliers with capacity. This is especially true in the areas that were hit hard by offshoring.”

Free calls for trade schools to revive their training programs to address the shortage, especially in high volume machining, forging, casting, die/mold making and textiles. He added that small American companies also need to learn how to become exporters again.

“Over 80% of job shops get little to no business from outside of the U.S.,” he said. “Dependency on the United States market and economy going forward is a risky strategy. Job shops must learn how to connect with and sell to customers abroad.”

That will require marketing and supply chain expertise. Free believes that potential customers are very active and sourcing based on their move to a more distributed supply chain.

“The fact that 78% of respondents reported being optimistic about their sales and profits for 2012 is a great sign for the U.S. economy,” he concluded. “Job shop owners are usually the leading indicators for greater economic trends.”

Related Editorial:

Some Manufacturing Leaving China for U.S.

Manufacturers Expect Rising Complexity

Labor Concerns, Sourcing Strategies Shifting

Importers Ordering More, Restocking Shelves

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