Monthly Archives : August 2019

Surprisingly,
we found employees want the basics first: better air quality, access to natural
light, and the ability to personalize their workspace. Half of the employees we
surveyed said poor air quality makes them sleepier during the day, and more
than a third reported up to an hour in lost productivity as a result. In fact,
air quality and light were the biggest influencers of employee performance,
happiness, and wellbeing, while fitness facilities and technology-based health
tools were the most trivial.

Organizations
have the power to make improvements in these areas, and they need to, both for
their workers and themselves. A high-quality workplace — one with natural
light, good ventilation, and comfortable temperatures — can reduce absenteeism
up to four days a year.  With unscheduled
absenteeism costing companies an estimated $3,600 annually per hourly worker
and $2,650 each year for salaried workers, this can have a major impact on your
bottom line.

Other
research finds that employees who are satisfied with their work environments
are 16% more productive, 18% more likely to stay, and 30% more attracted to
their company over competitors. Two-thirds of our survey respondents said that
a workplace focused on their health and wellbeing would make them more likely
to accept a new job or keep the job they have.

Worries about a global economic slowdown-which has been
exacerbated by renewed trade uncertainties-has caused financial markets to fall
dramatically. On a more encouraging front, job openings in the manufacturing
sector were unchanged at 503,000 in June, continuing to be an all-time high.
Over the past 12 months, job openings have averaged nearly 483,000 per month—a
highly elevated pace. With that said, the pace of hiring and separations slowed
in June, mirroring other economic activity and employment data.

“Manufacturing output, the biggest component of industrial production, fell 0.4% in July from a month earlier. That helped tug down broader output across factories, mines and utilities last month.”

“The manufacturing industry’s output accounts for about 75% of the nation’s total industrial output. The Fed said manufacturing output has fallen more than 1.5% since December 2018.”

“Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, dropped by 0.3 percentage point to 77.5% in July. Economists had expected 77.8%.”

NAM Chief
Economist Chad Moutray took a closer look at the manufacturing industry by
sector:

“In July, durable and nondurable goods production decreased 0.2 percent and 0.5 percent, respectively, for the month. Twelve of the 19 major sectors had lower output in July, with two others unchanged.”

“The reductions in manufacturing output were led by weaknesses in the machinery, nonmetallic mineral products, plastics and rubber products, printing ”          

Last week,
the spread between 10-year and 2-year Treasury bond yields inverted briefly for
the first time since June 2007. This spread is an important barometer, as it
has historically signaled that a recession could begin in 12 to 18 months.
Other yield curves around the world have also inverted, and this development
created turmoil midweek in financial markets.

“It is important to recognize, however, that the inversion of the yield curve does not necessarily mean that a recession is imminent. The U.S. economy continues to show strength, particularly for consumer spending and in labor markets, and it should grow 2.3 percent in 2019, with 1.8 percent growth forecasted for 2020. Still, the risks of a recession have picked up, rising to around 50 percent over the next 24 months.”

“There are warning signs out there. For instance, manufacturing production declined 0.4 percent in July, the fifth decrease in output in the sector year to date, and over the past 12 months, manufacturing production has fallen 0.5 percent. In addition, capacity utilization in the sector has dropped from 77.3 percent in December, the best since March 2008, to 75.4 percent in July.”

“Manufacturing labor productivity fell 1.6 percent at the annual rate in the second quarter, the first decline since the first quarter of 2018. It was pulled lower by reduced output for the second straight quarter, down 2.1 percent in the second quarter. In contrast, nonfarm business labor productivity rose 2.3 percent at the annual rate in the second quarter.and support, textile and product mills and wood products sectors, among others.”

Reshoring
and foreign direct investment in the U.S. increased 38% during 2018, the
highest level in history according to the Reshoring Initiative, the agency
formed to advance the effects of “reshoring.” The term describes the
phenomenon of manufacturers relocating manufacturing activity and services, or
sourcing, to the U.S. from overseas.  For
2018, the combination of reshoring and FDI represented 145,000 jobs, the second
highest annual rate of job increases on record. The total job increases
credited to reshoring, including upward revisions of 36,000 jobs in prior
years, is over 757,000 since the 2010 low-point for domestic manufacturing
employment.

As Baby
Boomers are beginning to retire, jobs are opening up, thus the Silver Tsunami.
According to the latest government data, there are now 522,000 open
manufacturing jobs in the United States (an all-time high), and a recent report
from Deloitte and The Manufacturing Institute (the National Association of
Manufacturer’s social-impact arm) projects that 2.4 million manufacturing jobs
will go unfilled over the next decade.

To fill these jobs more work will need to be done as misconceptions about the industry persist. For example, the study revealed that over half (53%) of the general population assumes the average salary of a mid-level manufacturing manager is under $60,000. In reality, the average salary for a manufacturing manager in 2018 was $118,500, according to the 2018 Salary Survey report from IndustryWeek.  Generation Z grew up in the midst of the Great Recession, watched their older peers accumulate student debt, then struggle to pay it off with low-paying jobs right out of college. They are seeking higher paid jobs in a more transparent and open learning environment, and they’re increasingly open to alternative types of education and training. Barr believes manufacturing jobs can meet their needs and provide the diverse and rewarding work experience they crave.

Bigger cracks are forming across America’s manufacturing foundation as lackluster global demand and persistent trade tensions led to the first contraction in U.S. factory activity since September 2009.  The IHS Markit manufacturing Purchasing Managers’ Index slipped to 49.9 from a final July reading of 50.4, according to a preliminary August report Thursday that trailed all estimates in Bloomberg’s survey of economists. Fifty is the dividing lines between expansion and contraction. The reading for the U.S. follow others from Europe and Japan that showed shrinking factory activity.  The U.S. data underscore the challenge of a bifurcated economy faced by Federal Reserve Chairman Jerome Powell and his colleagues — a battered manufacturing sector, beset by global fragility and trade tensions, and an invigorated American consumer powered by still-robust employment and incomes. The IHS Markit’s gauge of manufacturing has declined five points since this year’s peak in January, according to the report  which also showed the largest contraction in a decade for domestic orders and bookings from abroad.