Is the Manufacturing Jobs Boom Over? - Modern Distribution Management

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Is the Manufacturing Jobs Boom Over?

Optimism remains high, even as jobs growth falls.

Despite a dampened jobs report earlier this month, manufacturers remain optimistic about the industry's employment trajectory, according to the latest Purchasing and Manufacturing Survey from buying consortium Prime America. Sixty-one percent of respondents said they expected to add employees in 2015, and 79 percent of those say they already have.

This positive trend looks to continue for the remainder of the year, as no respondents are expecting layoffs and 47 percent expect to bring on additional employees.

That outlook is in contrast to the latest jobs report from the U.S. Bureau of Labor Statistics, in which manufacturing reported losing 27,000 over the past two months. In addition, wages were stagnant and hours worked declined slightly.

Why the shift? The U.S. is still behind other countries when it comes to competitiveness and productivity, according to Adams Nager, economic policy analyst at the Information Technology and Innovation Foundation.

"Job additions have been driven by resuscitated consumer demand, not by increased competitiveness and productivity as compared to our competitors," Nagers writes in a column for IndustryWeek. "And despite continuing claims that all is well, manufacturing job growth has suddenly come to a screeching halt, and the sector looks to be in a perilous position."

Part of the issue, according to Nagers, is the government's failure to reauthorize the Export-Import Bank, which provides subsidies and loan guarantees to foreign buyers of United States goods, in July. Congress plans to retake up the issue later this month, but there's no guarantee of passage.

The Trans-Pacific Partnership, a trade agreement connecting 12 countries including the U.S. and Japan, is also raising concerns for manufacturers – particularly in how it will impact U.S. auto jobs. But according to The Wall Street Journal, "The U.S. will keep its tariffs on Japanese cars for 25 years and truck tariffs for 30 years under the TPP. Tariffs on auto parts will fall more quickly, which could put pressure on some parts producers and the suppliers who work with them."

The TPP was designed to remove a host of trade barriers among the participating nations, such as tariffs, quotas and regulations, with hopes of stemming China's economic power in the region. The full text of the TPP won't be released for at least a month, so organizations such as the National Association of Manufacturing are hesitant to fully accept or reject the agreement. But it has a clear idea of what the TPP must achieve. "From the beginning, manufacturers have been loud and clear on the TPP: A strong agreement must embrace priorities that will grow manufacturing in the United States," according to a recent NAM statement.

Associate Editor Eric Smith contributed to this report.

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