Reshoring Limited by Skilled Workers

The Boston Consulting Group is forecasting that reshoring may create 2-3 million jobs by the end of this decade. However, a report from MFG.com shows that while reshoring is increasing, American manufacturers might not find the skilled workers needed to keep up with demand. “There's a severe shortage of workers,” says Mitch Free, manufacturing analyst and CEO of MFG.com. “Indicators are showing good signs; the market is active, reshoring is gaining speed and there's a high potential for growth. However, job shops (e.g., fabricators) are reporting that they cannot take advantage of this industrial growth because they're unable to find skilled machinists.”  

MFG.com surveyed more than 250 of America's job shops for its “Job Shop Health & Capacity Report” (April 2012) and found that:

Reshoring is real

“The results of this survey confirm that reshoring is real and job shops are benefitting. Forty percent of job shops reported getting a new contract that was previously sourced to a foreign supplier,” reports Mitch Free.

Reshoring is limited by unskilled workers

“Job shops are reporting one of their greatest challenges is finding skilled employees. Sourcing professionals have reported that they want to reshore more work but are having a tough time finding high quality suppliers with capacity. This is especially true in the areas that were hit hard by offshoring,” according to Free.

We need to start educating NOW

“As manufacturing began leaving the United States 20 years ago, it became an unattractive career choice, especially in the areas of high volume machining, forging, casting, die/mold making, textiles. Trade schools should revive their training programs to address the shortage. Job shops need to re-introduce the apprentice program,” said Free.

Job shops need to attract more foreign customers

“Over 80 percent of job shops get little to no business from outside of the United States. Small businesses need to learn how to become exporters. Dependency on the United States market and economy going forward is a risky strategy. Job shops must learn how to connect with and sell to customers abroad,” reports Free.

Marketing is crucial to new business generation

“Marketing is more important to job shops than ever before. Potential customers are very active in the market right now sourcing for varied reasons like moving to a more distributed supply chain or looking for local partners they can innovate with. Job shops need to become savvy marketers to attract this new business,” said Free.

American optimism abounds

“The fact that 78 percent respondents reported being optimistic about their sales and profits for 2012 is a great sign for the U.S. economy. Job shop owners are very in tune with where 'the rubber meets the road' and are usually the leading indicators for greater economic trends,” according to Free.

 

MFG.com is an online marketplace for the global manufacturing industry facilitating sourcing for custom parts, tooling, packaging, textiles and apparel. Mitch Free, CEO of MFG.com, is a member of the “Small Business Council” for CNBC and is a Small Business Contributor for TheStreet.com.

 

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