The manufacturing industry is a critical component of the global economy, contributing to job creation, innovation, and economic growth. Understanding the performance of this sector during specific quarters is essential for industry leaders and investors to make informed decisions. Performance levels moving into the fourth quarter have varied and are still influenced heavily by the events of 2020. Here’s what to look at as we enter the fourth quarter.
Numbers are Rising
Going into August, manufacturing output rose 0.1 percent. Manufacturing has seen a 1% gain in primary metals, machinery, aerospace and miscellaneous equipment, and furniture. In Q4, the only significant drop was in the automotive manufacturing industry.
Manufacturing capacity and utilization remained at 77.9% for August; however, that rate is 0.3% lower than the average long-run.
The remainder of 2023 is expected to feel more uncertainty regarding the supply chain. Despite a steady increase from 2020, the supply chain in all industries continues to suffer. It is anticipated that continued global disruptions will continue to harangue price projections in the fourth quarter. Low market demand and increased access to supplies will lower the price of steel, aluminum, and nickel, but the rise of base oil prices will raise prices in those fields.
Demand for Labor
Economic growth around the globe is still reasonably uncertain in the bottom half of 2023. Inflation and whispers of a recession can worry investors about spending their money. This generally does not bode well for manufacturing, as economic decline makes the commodity market forecast grim.
There is still a strong demand for skilled laborers in trade areas. With a generation that has grown up to achieve success through college and the current labor force aging out, the need for trade workers continues to grow. The labor is also physically demanding, and many workers retire earlier and earlier. By 2030, 2.1 million jobs will likely need to be fulfilled in manufacturing.
Since 2020, about 1.4 million jobs have been lost, and although the industry has largely recovered, it will need more workers moving forward.
Trends to Watch in Q4
Moving into the bottom half of the year and leading into the new quarter in 2024, it is essential to look toward the future of manufacturing. The adoption of advanced technologies remains a driving force behind manufacturing growth. Automation, robotics, and generative AI are currently being implemented throughout the industry. Of course, automation and robotics will help lower labor costs while retaining operational efficiency. AI will help increase efficiency, customer experience, and operations.
It is no hyperbole to say that the industry still feels impacts from 2020. Despite being almost four years out, the industry faces challenges, from supply chain disruptions to labor shortages. However, it is still essential to capitalize on opportunities presented by the adaptation of new technology and other efforts. However, it can be difficult to surmount the need for quality people. If you need help finding qualified professionals for your manufacturing needs, visit www.Spectra360.com to start searching.