Last week, I had the opportunity to attend the Manufacturers’ Association Economic Forecast. It highlighted many of the amazing aspects of manufacturing in South Central Pennsylvania as well as some challenges we are facing now and into the future.
The Manufacturing Landscape in PA
According to Pennsylvania’s Manufacturing Competitiveness PLAYBOOK published in September 2022, manufacturing in PA was a $113.2 Billion industry in 2021, which employed 562,700 people and represents 9.5% of the workers. At the time of this study, 90% of manufacturers were currently hiring and finding, hiring and retaining employees emerged as the most common issue raised. Further, 90% of the manufacturer are currently investing in or plan to invest in automation.
In looking to the future, less than 1% of high school student graduate with the skills to have a career in manufacturing, which is less than ½ of the demand. This will be exacerbated by the 13,000 jobs gap in the next few years due to retirements combined with anticipated manufacturing growth.
Manufacturing and the Economy
Thomas Neall, Director of Interest Rate Management at F.N.B. Bank, presented economic updates. He noted that the Consumer Price Index, Producer Price Index and the Personal Consumption Index are all rising at rates between 5.5% and 6.5%, much higher than the targeted 2% increases. The Jobs Openings and Labor Turnover Survey (JOLTS) by the US Department of Labor Statistics indicated that there were 1.93 open jobs in December 2022 per unemployed person, continuing the demand for labor. He further indicated that manufacturers in South Central PA employ 118,000 individuals and the average compensation is $82,000 (Sources: U.S. Bureau of Economic Analysis and the U.S. Census Bureau).
Secure Act 2.0
The morning ended with an overview of the Secure Act 2.0 presented by Alex Langan, CIO of Langan Financial Group and Christopher Kuhl, Secretary/Treasurer of PA Pension Planners. There are several significant impacts effective in 2024 that manufacturers should be considering for their employee benefit plans. These items include student loan matching programs, auto-enrollment and escalation requirements, increases in cash-out thresholds and various other changes. Several of our recent blog posts detail these topics more closely.
Overall, it was a great morning, with lots of networking, informative presentations, and time well spent with some manufacturing leaders in South Central PA.