Although the Federal Reserve slashed its outlook for the nation's economic growth at its early November meeting, it decided against taking any new measures to stimulate the U.S. economy. The Fed now predicts growth of just 2.5 to 2.9 percent in 2012, and unemployment of at least 8.5 percent. (As we went to press, unemployment had moved down to 9 percent.)
Meanwhile, Fed Chairman Ben Bernanke criticized Congress for not doing enough to stimulate the economy. The White House's jobs proposal is stalled in Congress, which is also struggling to reduce the deficit.
Not helping the jobs situation is productivity growth, i.e., companies are doing more with fewer workers. The Labor Department reports productivity rose at an annual rate of 3.1 percent in the third quarter of 2011. Labor costs also dropped at an annual rate of 2.4 percent in the July-September period - the first decline since 2010. Both of these developments are good news for companies, but not for workers.
In fact, U.S. manufacturers remain upbeat about their own companies and plan to spend accordingly. Seventy-five percent of the industrial manufacturing executives surveyed by PricewaterhouseCoopers (PwC) for its Q3 Manufacturing Barometer expect revenue growth over the next 12 months, with 22 percent actually expecting double-digit growth. Importantly, over the next 12 months, 55 percent of those responding to the PwC survey plan to make major capital investments, but only 38 percent said they expect to hire more workers.
Will these new employees come from the ranks of the 2.4 million manufacturing workers who have been laid off since 2007? Do they have the advanced skills that manufacturers want? Those possessed by the baby-boomers who are retiring on a daily basis?
The Manufacturing Institute believes those skilled workers will be difficult to replace. Training programs are needed to teach new work force entrants, as well as the unemployed, the advance skills recently described by Motoko Rich, economic writer for The New York Times, e.g., operating and maintaining computerized machinery, reading complex blueprints, and demonstrating higher machine proficiency. With that in mind, The Manufacturing Institute is launching a fast-track education and training program built on NAM's endorsed Manufacturing Skills Certification System. "Right Skills Now" is an accelerated education solution to train and deliver talent to manufacturers so that they can sustain and expand operations.
But, more importantly, that talent must be able to adapt and learn in a rapidly changing business environment if it is to participate in an economic recovery.