The Society for Human Resource Management (SHRM) reported that the pace of hiring in the service sector has picked up, but for manufacturers, it appears to be slowing. The monthly Leading Indicators of National Employment (LINE) report from SHRM says that 50.3 percent of manufacturers plan to increase their hiring in April, which is the exact same rate as one year ago. At the same time, there are 12.5 percent of manufacturers planning to decrease employment, up from 7.0 percent last year. As a result, the net percentage of new hiring in the manufacturing sector dropped from 43.3 in April 2012 to 37.8 today, or 5.5 percentage points lower.
In addition, this represents a deceleration of hiring from last month’s report, as well. In the March survey, there were 58.0 percent of manufacturers who said that they planned to increase hiring, compared to 8.9 percent planning to decrease. Therefore, the net hiring rate for March was 49.1 percent, suggesting that the pace of net hiring has slowed over the course of the past month (and not just the past year) in the manufacturing sector.
With that said, it appears to be getting easier to recruit new manufacturing workers. In March 2012, 18.3 percent of respondents said that it was more difficult to recruit, with just 1.1 percent feeling that it was easier for a net percentage of 17.2 percent. In this latest survey, the net percentage had dropped to 8.4 percent, with 7.7 percent suggesting that recruiting had become less difficult. Still, 16.1 percent continue to see hiring as a challenge.
Employment growth in the service sectors stands in contrast to what we see in the manufacturing sector. The April survey found that 49.4 percent of service sector respondents planned to increase hiring this month, with 7.6 percent expecting decreases. The net hiring for the sector was 41.8, or 21.7 percentage points larger than this time last year. In addition, service sector employers are seeing more difficulty in recruitment, with the SHRM release referring to a competitive “talent marketplace.”
The SHRM survey is one of the few that forecast employment one month ahead. In the meantime, the Bureau of Labor Statistics will report national employment data tomorrow. The consensus estimate is for an increase roughly 200,000 nonfarm payroll workers in March, with manufacturing employment seeing modest-to-weak growth.
Chad Moutray is the chief economist, National Association of Manufacturers.