FMA report reveals job shop business conditions

Fabricators and Manufacturers Association Intl., Elgin, Ill., has published its “Forming & Fabricating Job Shop Consumption Report” for Q4 2020. This biannual report compiles data from small to midsized job shops to provide an accurate and instructive assessment of what is happening in the heart of the U.S. manufacturing sector.

The latest report covering Q4 2020 offers commentary from FMA’s economic analyst Dr. Chris Kuehl before digging into respondent data. Dr. Kuehl highlights the trends of consumer consumption occurring throughout this unusual recession, the state of manufacturing, and respondents’ levels of cautiousness for the upcoming year.

COVID-19 lockdowns and safety measures have cut consumers off from the service sector—everything from restaurants to concerts and events and travel—that once accounted for more than 65% of their disposable income. As a result, there has been less damage inflicted on the overall manufacturing sector than would have been expected in a recession this deep.

Employment has been the key issue for the economy throughout the crisis. At one point, there were 50 million people thrown out of work in a single month. But like everything else with this recession, the impact has been unusual, with many of these job losses in the service sector. For manufacturers and fabricators, the labor issue is still one of shortage. There simply are not enough qualified people. Only 20.2% of respondents reported adding people to the payroll, while 57.5% reported stability in their workforce. Another 22.2% indicated they were reducing the size of their workforce. Anecdotal evidence suggests that most of these job losses were due to employers adding machines and robots to do the jobs that people once did.