Manufacturing Employment to Continue Growth in April

April 2, 2007

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Good news at the start of April: last month's SHRM/Rutgers LINE survey of HR executives reveals that hiring in the manufacturing sector is expected to repeat last year's substantial growth. Also, although recruiting remains a major concern for manufacturers, recruiting difficulty is down for firms in the sector.

Last week was not a banner week for the U.S. economy, as most indications are that the economy is stuck in low gear, and the possibility that the economy will decelerate in the first quarter from the sluggish pace attained in the fourth quarter is very real.

So it warms the cockles to hear that April hiring projections within the manufacturing sector will match the substantial growth seen in April 2006, according to the 2007 Employment Expectations report of the Leading Indicator of National Employment (LINE), a collaborative effort between the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations.

The indicator, based on surveys of human resource (HR) executives at manufacturing firms, reports on four employment measures: job expectations, new-hire compensation, recruitment difficulty and job vacancies.

For April 2007, the employment expectations index was nearly flat, dropping from 50.1 for March 2007 to 49.7 for April 2007. Slightly more manufacturers expect to expand their workforce in this month than in April 2006 (60.7 percent: 57.6 percent).

The responses to the March 2007 SHRM/Rutgers LINE survey reveal that new-hire compensation is rising "much more slowly than it was a year ago." Recruiting in the manufacturing sector remains a major concern; the percentage of firms that believe recruiting is getting harder is substantially larger than the percentage of firms that think it is getting easier. However, recruiting difficulty is down in manufacturing.

The new-hire compensation index for March 2007 (5.5) is well below the levels of a year ago (11.0). For the manufacturing sector, the March 2007 exempt vacancy index (16.3) is below the March 2006 level (24.0). The largest difference between 2007 and 2006 is the percentage of manufacturing-sector firms reporting increases in exempt vacancies. That percentage fell from 33.8 percent in March 2006 to 25.8 percent in March 2007.

Manufacturing-sector firms appear to be having more success in reducing the number of unfilled exempt positions. The non-exempt vacancy index dipped slightly from 17.4 in February 2007 to 16.2 in March 2007. The March 2007 non-exempt vacancy index (16.2) is well below the March 2006 index (23.8). The recruiting difficulty index for March 2007 (24.2) is considerably below the level of March 2006 (29.4).

This LINE employment-expectations report references the same April period as the report the Bureau of Labor Statistics (BLS) will release in early May 2007. The responses in the LINE survey are weighted using the proportion of total employment represented by the respondent's industry. Beginning this month, these weights have been recalculated to incorporate the annual benchmark revisions that the BLS released on February 2, 2007.


Earlier: 7 Major Hiring Trends for 2007

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