Employment in the American manufacturing industry surged to its highest level in nearly three years, signaling strong growth for one of the country’s vital sectors. According to an Automatic Data Processing (ADP) study cited by the Wall Street Journal (WSJ), which was corroborated by the Institute for Supply Management (ISM), the industry added 29,000 new jobs last month, with employment across all services sector increasing by 176,000.
The ISM further stated that the manufacturing industry’s employment index for March was 56.6, whereas its employment index for February was slightly lower at 55.0. Of course, any reading over 50 indicates growth, and any reading below 50 indicates contraction. A reading of 56.6 is pretty good for the industry, suggesting that the American manufacturing industry is growing at a steady and strong pace.
Most manufacturing companies will agree that the industry is making strong gains throughout the United States. Orders are coming in, and companies fulfilling them. With the newfound demand for manufactured products, however, also comes the need for new talent. Manufacturing companies are struggling to keep up with this recent surge in demand, so they are seeking to hire new employees to accommodate this growth.
Of course, all of this comes at a time when the United States is teetering on the edge if a trade war with China. After placing tariffs on certain Chinese products, China responded by placing its own retaliatory tariffs on U.S. products. Assuming this continues, it could have a lasting negative impact on the country’s economy.
When speaking about the potential for a trade war, economist Joel Naroff explained that it could severely affect the U.S. economy. “While a trade war could devastate the economy, conditions right now are quite good,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Statistics show that more than 12.4 million workers are employed in the American manufacturing industry, an industry that generates a gross domestic product (GDP) of roughly $2.2 trillion per quarter each year.
In terms of size, the United States is the world’s second largest manufacturer, surpassed only by China. One of the reasons for the country’s strong growth in the manufacturing industry is its expenditure of research and development. U.S. manufacturers spend significantly more money and resources on research and development purposes than manufactures in any other country. Furthermore, the country’s has a bustling tech sub-sector that provides some of the world’s leading business-to-consumer (B2C) and business-to-business (B2B) tech products.