- Manufacturing employment increased by 21,000 in February, rising for the ninth time in the past 10 months. Overall, the manufacturing sector remains a bright spot in the U.S. economy, with expanding demand and production and hiring moving in the right direction. With that said, manufacturing employment has fallen by 561,000 workers over the past 12 months.
- The average hourly earnings of production and nonsupervisory workers in manufacturing inched up from $23.18 in January to $23.19 in February, with a 3.1% increase over the past year, up from $22.50 in February 2020 (see chart).
- The ISM® Manufacturing Purchasing Managers’ Index® expanded at the fastest pace in three years, with strong growth for new orders, production and exports and hiring strengthening for the third straight month.
- With that said, supply chain disruptions remain a significant challenge. The backlog of orders soared to the highest level since April 2004, and raw material costs rose at the swiftest rate since May 2008 in the Institute for Supply Management® report.
- New orders for manufactured goods rose 2.6% in January, increasing for the ninth straight month. Over the past 12 months, factory orders have risen 2.8%—an impressive rebound after demand for manufactured goods plummeted 23.0% between February and April 2020.
- Manufacturing labor productivity rose 5.0% at the annual rate in the fourth quarter with strong rebounds in output, both for durable and nondurable goods, according to revised data
- Manufacturers’ optimism increased to nearly 88%—the highest reading in two years and up from 74% in the Q4 2020 survey.
- This steady improvement represents an increase of 54 percentage points since the Q2 2020 results (34%)—the first survey after the pandemic was declared.
- Increased costs of raw materials (76%) and the inability to attract and retain talent (66%) were the top-two biggest challenges facing manufacturers in 2021.
- Other top worries included rising health care and insurance costs (50.9%), transportation and logistics costs (50.2%), supply chain challenges with inventory management (48.7%) and an unfavorable business climate, including taxes and regulations (44.0%).
Share This Story, Choose Your Platform!