US Factories Boom, But Skilled Workers in Short Supply

US factories are experiencing a remarkable growth spurt, particularly in computer, electronic, and electrical manufacturing. However, concerns are arising about the scarcity of skilled workers needed to fill these expanding positions. While manufacturing construction spending has reached record levels, employment growth in the sector has remained stagnant, raising doubts about finding qualified individuals for the newly constructed factories.

To compete with global manufacturing powerhouses like China, the US government has provided substantial subsidies for electric vehicle and solar panel production. The CHIPS Act secured $280 billion for semiconductor manufacturing, while the Inflation Reduction Act and Infrastructure Investment and Jobs Act offered tax incentives and additional funding. Computer, electronic, and electrical manufacturing have seen the most significant surge in construction, with spending nearly quadrupling since early 2022 and accounting for over half of total manufacturing construction spending.

While employment in manufacturing reached its highest level in over a decade, the growth rate has lagged behind the overall labor market. President Joe Biden’s tenure has seen around 800,000 manufacturing jobs added, representing a growth rate of 6.5%, falling short of the 9.3% increase in overall employment. The lack of substantial employment growth, with only around 4,000 new employees this year, is concerning, especially considering the projected shortage of 2.1 million workers with technical expertise by 2030.

In conclusion, while the surge in manufacturing construction has received policy support and generated optimism, the ability to fill these new jobs is a growing concern. Smaller manufacturers may face significant challenges if they cannot scale up quickly, while the labor market may experience strain due to increased investment and domestic production, leading to wage and price inflation. Efforts are underway to address the shortage of skilled workers, but closing the skills gap and attracting a new generation of manufacturing workers remains a considerable task.