The 2019 Indiana Manufacturing Survey shows companies are increasingly concerned there aren’t enough workers in the industry. This comes when national unemployment numbers are low – and Indiana’s are even lower.
A number of economic indicators show a potential slowdown in the manufacturing industry, but Hoosier companies remain optimistic about the future. The 2019 survey comes on the heels of last year’s that highlighted the growth in automation investment. Now respondents across the state say the top issue they face is a growing shortage of both skilled and unskilled manufacturing workers.
Report co-author Mark Frohlich says these trends – like Industry 4.0 and labor shortages – started showing up as early as 2014.
“What was interesting was about half a decade ago we were just noticing these as blips on the radar screen, ‘hey look this might someday arrive or be an issue,’" Frohlich says. "And last year, if you will, the wave kind of crested with Industry 4.0 and a sizable number of Hoosier manufacturers getting involved in that. This year it really appears that the labor shortage truly has really hit home, so that trend we’ve been watching for half a decade now is hitting pretty hard.”
He says this comes at a time when the baby boomers are retiring, and unemployment levels are low.
“You’ve kind of created this leaky bucket if you will where you have people, rightfully, at the end of their careers exiting their profession and a reluctance of others to come in,” says Frohlich.
The survey also asked companies if the trade wars are impacting financial decisions. Some Indiana manufacturers responded saying the market uncertainty leaves them unable to make long-term plans and drives concerns over the implications to supply chains.
Frohlich says it’s not all adversarial though pointing to political and business leaders in Indiana are visiting other countries to learn how to improve the manufacturing industry here.
“We might compete against them daily in terms of our products but stepping back and learning from them like how do recruit young people into manufacturing and looking at apprenticeships in Europe and Asia and some of the things they do,” he says.
Frohlich says one idea that has been observed in other parts of the word is introducing manufacturing jobs to fourth and fifth grade students rather than waiting until high school to build the talent pipeline.
Most companies that participated in the survey say they are undertaking needed education and training to build the workforce. They suggest state tax credits would help.
The survey is commissioned by Indianapolis accounting firm Katz, Sapper & Miller with the results authored in a report from Indiana University researchers and promoted by the Indiana Manufacturers’ Association.