-from Financial Times

After four decades of factory closures and job cuts, the supply chain troubles caused by the Covid crisis boosted employment prospects in US manufacturing. High shipping costs and prolonged delays prompted companies to make more products in America.

But, as economic growth has slowed and vacancies in traditional industries have dried up, manufacturing workers have become reliant on federally subsidised “cleantech” jobs for employment.

However, many of these jobs have yet to be filled, leaving workers and economists questioning whether US manufacturing will ever boom again.

As a part of its pandemic recovery plan, the Biden administration has sought to stimulate investment in new industrial projects, such as building electric vehicles and assembling semiconductors, through the Inflation Reduction and Chips and Science acts. Their aim is to create hundreds of thousands of what the government calls “good paying jobs” in manufacturing.

Companies, including Intel, Micron, Analog Devices, and Taiwan Semiconductor Manufacturing Company, have pledged to spend over $200bn on more than 100 projects and thereby create tens of thousands of jobs, taking advantage of billions of dollars in federal subsidies.

Spending on manufacturing construction in August reached its second-highest figure since the Census Bureau began tracking the data in 2002, up 143 per cent from the same month in 2019. But the jobs heralded as the future of US manufacturing have been slow to appear as raw material shortages have delayed construction. Companies also say they are struggling to find workers with the knowhow to operate high-tech facilities.

“Manufacturers have been a standout during the jobs recovery over the past two years, particularly over the past eight months as the skilled service economy has slowed,” says Aaron Terrazas, chief economist at jobs site Glassdoor.

While the elevated consumer spending that powered the jobs gains of the past two years has slowed “there are some legitimate points about changing trade patterns that would support the idea of a more enduring sustained recovery in manufacturing jobs”, he explains. However, he adds that “there are lingering questions over the degree to which that can or will continue”.

The number of jobs and wages certainly grew dramatically during the Covid crisis, as spending shifted from services to goods, and manufacturers hired rapidly to keep up with demand.

By May 2022, more Americans were working in manufacturing than before the pandemic. By this September, manufacturing employed 13mn people, up from 12.8mn in the same month in 2019. Job creation and wage growth have slowed but remain elevated, according to Indeed, the largest the jobs site in the US. On September 22, there were 51.3 per cent more manufacturing jobs posted on Indeed than in February 2020. Total postings on the site were up just 26.6 per cent over the same time period.

Growth has slowed, though. Manufacturing vacancies on the site are down more than 20 per cent on September last year, according to Indeed economists Cory Stahle and Nick Bunker, compared with a 15 per cent fall overall. The new “cleantech” jobs have yet to fill the gap, Terrazas says, as many projects are still in their early stages.