Manufacturing increases nationally for fifth consecutive month

Economic activity in the U.S. manufacturing sector continued to expand in October, according to the Institute for Supply Management's report. The manufacturing index, calculated at 56.4 for October, marked a 0.2 percentage point increase from September. Being the fifth consecutive month above 50 percent, the indices reveal continued growth of the manufacturing market.

Separated by manufacturing processes, the report indicated which areas drew the biggest growth. New orders and production both showed considerable momentum, with index values of 60.6 and 60.8, respectively. Textile mills, food, beverage and tobacco, fabricated metal, furniture, appliances and components and computers and electronics were among the industries reporting growth in both areas.

Hiring increases
Employment among manufacturers registered an index of 53.2 percent, which makes October the fourth consecutive month of growth. The trend will likely continue for November, according to research by the Society for Human Resource Management (SHRM).

According to SHRM's monthly national employment report, 49 percent of manufacturers plan to add jobs in November while only 8.6 percent plan to cut their workforce. This means November is expected to bring a net job gain of 40.4 percent for manufacturing, compared to only 33.7 percent for the service sector.

The report also revealed a growing number of manufacturers are having trouble recruiting new employees. In October, a net of 18 percent of manufacturing respondents had difficulty recruiting, which is up from only 11.9 percent during the same time last year.

Dealing with labor shortages
While many companies are experiencing a boost in new orders and production, the difficulty in recruiting could threaten to slow growth. During October, a growing number of manufacturers experienced a backlog of orders, according to the ISM report, with 86 percent falling behind on demand. Of those companies, a quarter reported increasing backlog during the month of October, which is higher than the three preceding months. Many firms could be turning to manufacturing recruiters to aid operations. Keeping a full workforce means a company has the ability to accept new clients and meet higher demands for production.

A large number of skilled workers are needed in manufacturing industries, but unfortunately, these employees can be the toughest to find. According to a previous SHRM report, nearly all respondents said a shortage of skilled workers would have an impact on the workforce during the next five years. As finding educated and experienced workers becomes a growing challenge, firms should seek engineering recruiters to fill vacated positions.