Automated Data Processing (ADP) reported this morning that manufacturing employment fell by 8,000 workers in October. This was the third consecutive quarter of declines. While other indicators suggest some areas of recent improvement, the ADP survey finds that this has not yet led to a resumption of job growth. Overall, total nonfarm employment rose by 110,000, almost entirely from increases in the service sector.
Aside from sectoral differences, these numbers also provide a contrast by establishment size. Small and medium-sized payrolls (e.g., those with less than 500 employees) generate the bulk of the net new jobs for both the goods-producing and service-providing sectors. Within the goods-producing sector (which includes manufacturing, mining and construction), medium-sized payrolls (e.g., those with 50 to 499 employees) saw a net increase of 6,000 workers; whereas, larger firms shed 10,000.
The ADP figures suggest that employment growth has been relatively modest, with manufacturing job growth being below par. A similar finding will probably be found in Friday’s employment report from the Bureau of Labor Statistics. If we are to make significant inroads into improving our overall economy and job picture, manufacturing will need to play a vital role.
Chad Moutray is chief economist, National Association of Manufacturers.
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