It’s no surprise that there have been rumors swirling of a negative economic situation in 2019. We’ve seen lot of change in 2018 and it’s only human to feel uncertain about the unknown.
The health of the economy is especially important for anyone in the business of manufacturing and staffing. Manufacturers need to be able to meet demands, and staffing agencies like Employment Solutions need jobs to fill.
The good news? Economic growth in 2019 may slow down, but we are not likely to fall into a recession. Based on insights from economic experts, we have some tips on how your business can thrive in 2019, even if economic growth slows.
2018 in review
We saw a lot of economic growth in 2018. An article from the Washington Examiner explains that “As of December ’18, 2018’s real GDP growth seems headed toward 3.0 percent for the year or slightly better. This compares strikingly with 2016’s 1.6 percent and 2017’s 2.2 percent. Driven favorably by tax cuts, relief from regulation, and recently falling energy prices, the trend is definitely positive.”
Staffing Industry analysts also found that in 2018 “total nonfarm employment rose by 312,000 jobs, well above (70% higher) the expected gain of 184,000 jobs. Job gains were broadly positive across a range of sectors in the economy, from professional services and healthcare, to the more cyclical sectors of manufacturing and construction.”
As a result, we’ve seen manufacturers are optimistic about the regional economy, sector growth, and increasing revenue expectations in 2019.
2019: Slowing but no recession
Experts look at a variety of factors to determine what the economy might be like in the coming year. MarketWatch explains that one good indicator of economic health is the number of jobless claims:
“Jobless claims are one of the timeliest leading indicators of the economy because they’re released every Thursday. They’re also extremely accurate because people tend to go to the unemployment office to collect their unemployment checks when they’re out of work,” the author explains.
“If the economy were entering a recession, we would be seeing a rise in jobless claims as employers start to lay off workers. We are not seeing that. In fact, jobless claims are near 50-year lows and just fell by 3,000 to 213,000.”
We’ve seen positivity across the board. In fact, 81 percent of manufacturers predict their revenue to increase in 2019, and 61 percent remain optimistic about the sector overall expanding. Despite political uncertainty, optimism for regional and national economics has increased by about 12 percent.
What this means for manufactures
In last month’s newsletter, we talked about the Deloitte study and the importance of investing in future technologies to support a good working relationship between humans and artificial intelligence (AI) in manufacturing. So, it’s no surprise that experts are also recommending a focus on AI integration to adapt to the slowing economy. According to Manufacturing Global, a focus on diversifying the workforce and investing in future manufacturing technologies will help manufactures adapt in the right way, so that they can make the most of slower economic growth.
“2018 saw the continuation of a major conversation and focus on diversity across all levels of society. From a manufacturing perspective, the business case is clear – an organization is likely to perform better financially if its workforce is more diverse. Diversity is going to continue to be top of the agenda for many years to come, and with greater public awareness will come increased government scrutiny and tougher legislation. Forward thinking businesses will pre-empt this by implementing more rigorous and impactful programs to accelerate the diversification of their workforces.”
What kinds of technology should manufacturers invest in?
“The increased adoption of IoT (internet of things) will also see an increase in the amount of data that manufacturers produce. Data may be the crude oil of the 21st century, but without the ability to analyze and action based on tangible, accurate insights, it is simply taking up space. This is where artificial intelligence and machine learning comes in – having the ability to manage volumes of data, generate legible insights and proffer solutions will greatly increase manufacturers’ responsiveness, improving efficiency and helping identify new business opportunities. 2019 will see greater levels of importance attached to manufacturers’ ability to incorporate AI and machine learning into their operations,” Manufacturing Global explains.
Technology and growth go hand-in-hand. That being said, the most challenging part of the business manufacturers are facing in 2019 is still finding qualified labor: 52 percent say this is their greatest barrier to growth. That’s where we come in.
How the staffing industry might react
It’s no surprise that with the push for increased technology in manufacturing, staffing agencies should also try to incorporate new technologies in recruiting. Staffing Industry analysts suggest that staffing agencies should look closer at analytics outside of their own business and we heed their advice.
“Increasingly, analytics that look at the talent landscape in specific markets, including competition for and availability of qualified talent in one city or region, as well as compensation norms, are coming into play in tandem with business analytics to create the most effective, sustainable approach.”
We are excited about 2019 at Employment Solutions, and we look forward to another year of providing the most qualified candidates for our clients.