New York Manufacturing Has the Demand, Now We Must Build the Capability
Randy Wolken, President & CEO

The latest national manufacturing and workforce data offer an important message for New York: advanced manufacturing. We aren’t suffering from a lack of opportunity. Increasingly, the challenge is whether we have the people, technology, infrastructure, and productive capacity necessary to capture it. Two new reports make the point.

The Institute for Supply Management’s August Manufacturing PMI registered 54.6. While slightly below July, any reading above 50 represents expansion. New orders remained solidly expansionary at 53.7, while manufacturing employment remained above 50 as well.

At the same time, the Bureau of Labor Statistics’ latest Job Openings and Labor Turnover Survey shows a striking development. Manufacturing job openings increased from 501,000 to 580,000 in July – a 16 percent increase in just one month. Openings in durable-goods manufacturing rose from 353,000 to 429,000.

Yet manufacturers hired fewer people. Manufacturing hires declined from 333,000 to 288,000, while layoffs remained very low.

Taken together, these numbers tell an important story. Manufacturers have work. They need people. But they are struggling to turn job openings into productive workers.

For New York, this should change how we think about our advanced-manufacturing strategy.

For years, workforce development has understandably focused on getting more people interested in manufacturing careers. That work remains important, and we will continue to focus on that at MACNY and the Manufacturers Talent Institute (MTI). However, the new data suggest the challenge is increasingly more complicated than simply finding applicants.

We need to convert available people into individuals who possess the skills manufacturers actually need. That means workforce development must increasingly become capability development.

Advanced manufacturing today requires considerably different skills than it did even a decade ago. Modern plants depend upon automation, robotics, CNC equipment, industrial controls, advanced quality systems, data analytics, artificial intelligence, and increasingly sophisticated maintenance capabilities.

Employers therefore need more than workers. They need people capable of operating, maintaining, improving, and eventually redesigning highly technical production systems.

New York has an opportunity to respond.

Registered apprenticeship, pre-apprenticeship, employer-desired credentials, community college partnerships, incumbent worker training, and programs such as the state’s new semiconductor workforce training incentives, of which we are a partner in, can all help close the gap between an available worker and a productive manufacturing employee. Currently, our MTI is a leader in developing apprenticeships and pre-apprenticeship opportunities throughout the state.

But we should measure these programs differently.

The most important question is no longer simply, “How many people complete training?”

We should ask, “How many acquire an employer-valued competency? How many enter manufacturing employment? How many remain employed? How many advance into higher-skilled positions? And ultimately, did those investments increase the productive capacity of New York manufacturers?”

The new data also make incumbent-worker development increasingly important.

Manufacturing layoffs remain extraordinarily low. Employers clearly value the skilled people they already have. In a market where specialized workers remain difficult to replace, helping an existing employee acquire additional technical capabilities may produce a faster return than attempting to recruit externally.

That makes workforce development and manufacturing modernization two sides of the same strategy.

Manufacturers should simultaneously invest in people and technology.

Automation, robotics, artificial intelligence, and advanced equipment aren’t substitutes for workers. These technologies make existing workers more productive while allowing companies to expand despite persistent difficulty filling certain positions.

The latest ISM data reinforce this point in another way.

Supplier deliveries are slowing while input prices remain elevated. When demand is growing but suppliers struggle to keep pace, the answer shouldn’t always be accepting higher costs or importing more products.

Sometimes the answer should be building more manufacturing capacity here.

That creates an important opportunity for New York economic-development policy.

Our state has rightly competed for transformational investments such as Micron’s planned semiconductor complex in Central New York. We should continue pursuing large, advanced manufacturing projects of that scale.

But we should bring the same urgency to helping existing manufacturers expand.

Across New York, there are hundreds of manufacturers that could add equipment, automate production, enter new supply chains, expand facilities, train workers, or develop new products if the right constraint were removed.

For one company, that constraint may be skilled workers.

For another, affordable power.

For another, capital.

For another, permitting.

For another, technology expertise or access to a new customer.

Our economic development system should become exceptionally good at identifying those constraints and removing them.

The opportunity is particularly significant as New York enters a new era of semiconductor, artificial intelligence, defense, energy, and infrastructure investment. Each of these sectors requires enormous supply chains filled with manufacturers producing components, materials, equipment, electronics, cooling systems, electrical infrastructure, and precision products.

New York already has many of those companies.

Our task is to help more of them become ready for what comes next.

The latest economic data therefore offer something more useful than another debate about whether manufacturing is expanding or contracting. They reveal where the real challenge lies.

Demand exists. Job openings exist. Investment opportunities exist.

What is increasingly scarce is productive capability.

New York’s advanced-manufacturing strategy should therefore focus relentlessly on building it – by developing skilled people, modernizing existing manufacturers, strengthening domestic supply chains, expanding dependable energy infrastructure, and accelerating investments that allow companies to grow.

If we do that successfully, we will not simply fill more manufacturing jobs.

We will build more competitive manufacturers – and position New York to capture the extraordinary industrial opportunities now taking shape.