U.S. manufacturers face new obstacles as the economy rebounds
US economy is rebounding at last thanks to the excessive amounts of coronavirus stimulus aid and accelerated vaccine rollouts. After the months of lockdowns, U.S. factories are opening again. However, many employers have a hard time securing workers or parts they need.
MRS Machining produces metal parts in rural Augusta, Wis. Its owner Matt Guse stated that business is rebounding so quickly that his 47-worker shop is short-handed. He had to turn down a million dollar’s worth of work during the last two weeks. While he has the open capacity, he needs more people.
When the pandemic first hit the U.S. last year, lots of businesses laid off their employees. Companies were unable to pay wages to their workers due to the dwindling customer demand. Initially, manufacturing employment reduced by 1.4 million. However, now some companies are desperate for workers.
Shortages of various manufacturing parts also pose the serious problem
In some cases, the main problem is the shortage of manufacturing parts, as well as supply chain disruptions. The companies are unable to fill orders quickly, and that creates fresh uncertainty.
Diane Swonk, the chief economist at the accounting firm Grant Thornton in Chicago, noted that manufacturers weren’t prepared for such a surge of demand for various goods. According to the Commerce Department, orders for durable goods, such as appliances and cars, soared by 0.5% in March.
The Biden administration is also focusing on increasing factory jobs, especially in areas like electric vehicles and semiconductors. Some analysts even think that the manufacturing recovery signals a turning point. That growth will be crucial for the expansion of the overall economy in the months ahead.
Chad Moutray, the chief economist for the National Association of Manufacturers, stated that while factory production reduced substantially because of the coronavirus, it should return to pre-pandemic levels by the third quarter of this year.
Scott Paul, president of the Alliance for American Manufacturing, also notes that rebuilding overall factory employment is a serious challenge.
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