By John Brandt
Manufacturing may not be booming, but the news is better than some naysayers would have you believe. What’s more, with a little optimism and opportunistic planning, industrial growth could be even faster.
Manufacturing employment rose again in June by more than 11,000 employees. Growth in Q2 2012 averaged 10,000 employees per month, below the average of 41,000 per month during Q1 2012. That’s the bad news. But since June 2011, manufacturing employment has grown overall by 1.9%. The manufacturing unemployment rate stood at 6.9% in June, a decrease from 9.2% in June 2011. (Overall nonfarm unemployment was unchanged May-to-June at 8.2%.)
Yet there’s more to this story than new full-time jobs. The manufacturing workweek in June grew by 0.1 hour to 40.7 hours, and manufacturing overtime for all employees was 3.3 hours for the fifth consecutive month (4.3 hours for production employees). That’s doesn’t look like a one-time surge to meet unexpected demand; instead, it suggests a consistent strategy of using overtime hours rather than hiring.
The U.S. has nearly 12 million manufacturing employees. Imagine if even half of those overtime hours were applied to creating new full-time positions, instead of just additional hours for current employees. Simple math says that nearly 500,000 new jobs could appear. Even with current employees losing overtime wages, it’s hard to envision a scenario in which a half-million new jobs wouldn’t boost the economy into overdrive.
U.S. Bureau of Labor Statistics
At some point, even incremental demand increases will create an employment inflection point — spurring hiring instead of additional overtime. Many studies associate workweeks beyond 40 hours with decreasing productivity, rising safety risks, and, subsequently, diminishing returns. Are we there yet?
Contact The MPI Group to learn how you can tap into the expansive findings of the 2011/2012 MPI Manufacturing Study. MPI offers online tools that allow you to examine and filter MPI data highly specific to your facilities (size, industry, nature of operations, practices in place, etc.).
 The Unemployment Situation — June 2012, Bureau of Labor Statistics, U.S. Dept. of Labor, July 6, 2012.