Inside the Labor Report: Manufacturing's Silver Lining (May 2021)

New data released by the Bureau of Labor Statistics finds that after adding jobs consistently since February of this year, U.S. manufacturers shed 18,000 jobs in April. This is the first time since January that the sector lost jobs. Meanwhile, employment in the U.S. economy overall increased by a relatively paltry 266,000 jobs, compared to the 916,000 jobs gained in March.

The loss in manufacturing jobs comes as a surprise, given that job openings in manufacturing have hovered above the 500,000 mark for several months in a row now. Additionally, manufacturing activity across the U.S. has been surging, with new orders and production continuing to expand rapidly as the sector recovers from the pandemic. Many manufacturers, in fact, have referred to the manufacturing labor shortage as among their top challenges, detailed in the latest ISM survey. 

So why job losses and not job gains in manufacturing? A deeper dive into the data provides further insight.

April 2021 Job Changes in Manufacturing by Subsector

Industrial companies are grappling with a host of challenges at the moment, from supply shortages to high prices – and a shortage of skilled workers. The global semiconductor shortage in particular is wreaking havoc across multiple supply chains and is impacting the auto industry most heavily.

Many automakers have had to idle or cut back production as they wait for the vital components and parts needed for their manufacturing processes. This is reflected in the latest report, which finds April's drop in manufacturing employment is almost entirely attributable to the auto industry.

Specifically, transportation equipment shed 28,000 workers in the U.S. in April, while motor vehicles and parts dropped by 27,000. Overall, durable goods manufacturing, which includes the auto industry, fell by 20,000 jobs.

However, losses in the auto sector were partially offset by gains in the miscellaneous manufacturing industry, which added 12,600 jobs, and machinery, which added 3,700. Electrical equipment, electronic instruments, computer and electronic equipment, and primary metals all added jobs over the month.

Additionally, non-durable goods manufacturing posted a net gain of 2,000 jobs over the month, led by chemicals, miscellaneous non-durable goods, apparel, and plastics/rubber.

So here's the good news: even though on net the U.S. manufacturing sector lost manufacturing jobs last month, the losses were almost entirely attributable to losses in the transportation equipment sector, and are not reflective of widespread losses across multiple subsectors.

Manufacturing companies are stiruggling to hire skilled labor right now. If you’re looking to help manufacturers with their staffing and recruiting needs, an IndustrySelect subscription can help you find new customers in the industrial world. Visit our website to try out a free demo!