2024: The Second Half
by Rich Hobbs
President & CEO
MRC
As we move into the second half of 2024, many thoughts come to mind in general, and specifically for manufacturing in the Lehigh Valley. It’s a political election year so that always weighs heavily with lots of trepidation about who the next president will be and how their policies will impact the economy and the world. This election cycle is no exception, given the many changes and remarkable situations that are unfolding with the presidential candidates!
Rich Hobbs
Manufacturing, for the most part, continues to do well in the Valley. That said, the usual suspects of inflation, employee attraction and retention, as well as lingering other workforce issues continue to be high on the minds of our manufacturing community. On the inflation side, many manufacturers are waiting for interest rates to drop to start new borrowings. The rumors are that the Fed will drop rates, but the likelihood keeps getting extended further out into the year. Instead of multiple drops early in the year, it now looks as if only one rate cut may happen late in 2024, a far cry from what was hoped for as we entered 2024.
On the employee attraction and retention side, the pendulum has swung more to retention as the hot priority. Companies are trying not to lose out on their already made investments in current employees. They are investing more dollars into training their workforce to show signs for positive retention, which has helped bolster the MRC’s training demands. The employees are realizing that the training investments are a good sign for longevity and are respecting their employers for the positive signs.
Exits from the workforce with baby boomers retiring are continuing. As each boomer retires, they take roughly 40 years of experience from the workforce! New hiring has slowed a bit, with the process taking longer with significant vetting taking place, especially for higher level salaried manufacturing positions. Salaries are also not as high as in previous years, as companies are trying to be more cautious by offering wages that are sustainable. Unemployment has ticked up recently, touching 4%, still low by historic measures, but definitely indicative of some layoff activity.
With workforce issues, many manufacturers are thinking more about automation and advanced manufacturing techniques (AMT) to help minimize their exposure. That said, the MRC will begin offering AMT training in September to help our manufacturers better grasp the concepts, while being able to put together business cases and projected returns on investment (ROI’s) for anticipated projects. The state, as well as MRC, has launched new tools to help companies asses their relative level of AMT readiness. The DOE has launched a new grant (DOE SMART Manufacturing) with the MRC as one of the participants/grantees in this area. More to come as we continue to educate our manufacturing clients on AMT!