Manufacturing orders and shipments are recovering, but employment still lags.
By Manuel Gutierrez, Consulting Economist to NKBA
Manufacturing orders and shipments each rose again in July, continuing the rebound from the pandemic-driven collapse back in April.
Manufacturing orders totaled $466 billion in July, rising 6.4% for the month, the identical growth experienced during the previous month. Shipments, at $480 billion in July, rose 4.6% for the month.
Despite gains experienced over the past three months, manufacturing orders and shipments continue to trail sales experienced throughout most of the last two years. For instance, in July 2019, orders averaged $495 billion a month, 6% higher than July 2020 levels. Still, the graph for both orders and shipments essentially show a V-shaped recovery from April lows.
The key force driving July’s increases emanated from Transportation Equipment, with shipments gaining 36% and orders up 18%. These increases were driven primarily by the automobile sector, with auto shipments registering increases of 50% just in July. (Auto sales are not shown in the chart below.)
Despite the strong gains in manufacturing orders and shipments, industry employment has not kept pace. Shipments are 8.8% higher than they were at the beginning of 2016, and orders are up by a smaller 6.6% — but over the same period, manufacturing employment is actually 2.2% lower.
Additionally, since April, when the economy hit bottom as a result of the pandemic jolt, shipments have risen by 19%, far greater than the 5% employment recovery experienced during the same period.
