ADP Reports Fall in Manufacturing Employment in May

By June 1, 2011Economy

According to the ADP National Employment Report released this morning manufacturers shed 9,000 jobs in May following nine straight months of positive growth. With the much-talked-about “cooling” experienced in manufacturing over the past couple months this is not a surprise. The ADP report also said that nonfarm payroll jobs increased 38,000 in May, which is well below expectations.

The goods-producing sector as a whole was down 10,000, primarily from larger establishments with 500 or more employees. Small and medium-sized goods-producing payrolls added employment over the month on net.

For manufacturing, these numbers mirror larger trends in the data, including yesterday’s Chicago Business Barometer. Later this morning, the Institute for Supply Management will release the Purchasing Managers Index for May, and on Friday, the Bureau of Labor Statistics will release the official employment numbers. I would expect to see similar trends in both of these data sources and I will have additional analysis later this morning. 

Today’s report reminds us that while the long-term outlook for manufacturing is positive manufacturing has still not yet fully recovered and we need to remain cautious. Higher energy prices and the slow housing sector are continuing to be a drag on the economy. Many of the current declines can also be attributed to supply chain disruptions and other factors, many of which are temporary in nature. If manufacturers are to continue to remain competitive and drive the economic recovery sound policies from Washington are necessary to ease the uncertainty still facing many businesses. 

Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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