The manufacturing industry is crucial for the world’s economy since it largely impacts economic growth and creates job opportunities. Understanding the manufacturing industry employment statistics enables businesses to identify areas of strength and weaknesses in this sector to develop their companies and perform better. This article explores the key factors and trends of the manufacturing sector.
Manufacturing Industry Employment Statistics
- Manufactured goods are necessary for trade. A Global Teach-In report shows that 80% of the interregional trade in the US is in manufactured goods.
- The manufacturing industry boosts economic growth, increases job vacancies, and reduces poverty and war.
- According to China Mike, China obtained official recognition as the world’s largest manufacturing nation, beating USA’s 110-year-long streak. Subsequently, in 2017, it was appointed the world’s largest economy.
- Increased automation has minimized labor requirements, thus leading to a decline in job opportunities. As companies replace manual labor with automated processes, certain jobs are no longer needed.
- According to a Gitnux blog, employment in manufacturing in 2018 accounted for nearly 13% of the total workforce globally.
- A Statista report shows that India’s manufacturing sector’s employment declined from 2017 to 2018, then increased modestly till 2020. Due to the pandemic, it showed a sharp decline from 2020 to 2021, when many workers lost their jobs.
- According to The Statista Research Department, Japan had around 7.7 million employees in the manufacturing sector in 2020.
- CEIC Data released statistics in 2023 showing the manufacturing employment trends in South Korea from 2013 till current time. In April 2023, the value decreased to 4421 (in thousand persons) from 4463 in March 2023.
Overview of the Manufacturing Industry
Why is Manufacturing Important?
The manufacturing industry consists of raw materials’ physical, chemical, or mechanical transformation into useful products. It requires both power-driven machines and the hands-on skills of workers. The workforce in manufacturing mainly consists of the middle-working class.
1. Economic growth and development
The manufacturing sector has major contributions to the economic growth of a country. It produces goods for trade and investment, thus generating revenue. According to Geeks for Geeks, manufacturing industrial development is crucial for removing poverty and unemployment from a country. Agro-based industries greatly benefit from manufacturing through equipment, farming products, and more.
Manufactured goods are necessary for trade. A Global Teach-In report shows that 80% of the interregional trade in the US is in manufactured goods. If a trade deficit piles up due to a shortage of trading goods, the value of a dollar may decrease, making imports more expensive.
2. Job vacancies
The manufacturing industry has played a crucial role in the modernization of the agricultural sector, as Geek for Geek states. It offers jobs in the secondary and tertiary sectors, which are great alternatives with higher salaries.
According to the Global Teach-In, one manufacturing job creates three other jobs. This is known as the “multiplier effect,” where wages from manufacturing laborers are re-spent in other parts of the economy.
3. Reduced Poverty Rates
A country with a strong manufacturing sector would eliminate poverty and war. Middle-class jobs in manufacturing encourage a middle-class economy, reducing any imbalances in power.
Types of Manufacturing Jobs
Manufacturing jobs are those which take raw materials to create produced goods. It makes products, not services. These jobs are mainly in a factory, plant, or mill and require a human workforce, for example, bakeries and tailors. The following are a few types of manufacturing jobs:
1. Machine Operators
They are responsible for operating and maintaining the machines and equipment used in manufacturing. They adhere to safety and quality standards and ensure all operations run smoothly.
2. Production Workers
They plan, schedule, and coordinate manufacturing activities to ensure the production process runs smoothly and efficiently. Production requirements, production schedules, and resource allocation are all responsibilities of the production worker.
3. Assembly Line Workers
They assemble products by following standardized processes and close instructions. The work of an assembly line worker is most valuable in manufacturing because they gather components and parts to make finished goods. Their tasks overlap with machine handling, performing quality checks, and ensuring smooth production.
4. Manufacturing Engineers
Engineers focus on improving manufacturing processes’ efficiency, productivity, and quality. They develop solutions for improvement and analyze production workflows to enhance overall performance.
5. Logistics and Supply Chain Operators
They track the movement of materials, components, and finished goods throughout manufacturing. They ensure the availability of materials and delivery of the finished goods to consumers efficiently.
6. Management and Leadership
Professionals in leadership positions oversee the whole manufacturing process, coordinate teams, and make informed decisions for the company’s benefit. They handle production and manage resources while ensuring continuous improvement.
Global Employment Trends in Manufacturing
Historical Manufacturing Employment Trends
According to GoRemotely, China has always shown high employment rates in manufacturing. In 2009, China produced 18.6% of the world’s manufacturing output, 1.3% less than the United States.
Judith Banister (BLS) published a report in 2005 about manufacturing employment in China. In 2002, the country had an estimated 109 million employees in manufacturing. It declined in the late 1990s due to the restructuring and privatization of state-owned factories, but after 2000, there was a positive trend in manufacturing employment.
According to an International Labor Office report, employment growth rates in India in organized and unorganized manufacturing were relatively low. However, unorganized manufacturing increased sharply between 1999 and 2005 at about 6% per annum.
Indian Employment in Manufacturing
Source: International Labor Office
As per a GoRemotely blog, the US manufacturing industry lost 5 million workers between 2000 and 2014. In 2005, employment in manufacturing was 9.7% of the total employment in the US. This declined to 8.2% in 2010.
- A FRED St. Louis report shows data on manufacturing employment in the United States. One of the highest values was recorded in 1981, after which there was a general downward trend in employment with a few fluctuations. However, in 2001-02, there was a sharp decline in the values up until 2010 – an all-time low.
Manufacturing Employees in the US, in Thousands of Persons
Source: FRED St. Louis
As per FRED St. Louis, employment was at an all-time high in 2002 in Japan, after which it steadily decreased till 2005 and then increased till 2007. There was a sharp decline between 2008 and 2009 due to the global economic crisis. Despite Japan’s historically strong financial system, the structural changes over the past decade made it particularly vulnerable to the situation.
Manufacturing Employment by Economic Activity, All Persons for Japan
Source: FRED St. Louis
The Federal Reserve Bank of St. Louis published data showing the manufacturing employment trends for Germany from 2005 to 2012. In 2007, manufacturing employment was the highest but saw a sharp decline until 2010.
Manufacturing Employment by Economic Activity in Germany, in Persons
Source: FRED St. Louis
Recent Manufacturing Employment Trends
According to a Gitnux blog, employment in manufacturing in 2018 accounted for nearly 13% of the total workforce globally. This means that around 470 million employees were in the manufacturing industry all over the world.
It is common knowledge that China has become a manufacturing powerhouse over the years. According to China Mike, China obtained official recognition as the world’s largest manufacturing nation, beating USA’s 110-year-long streak. Subsequently, in 2017, it was appointed the world’s largest economy.
YCharts published the manufacturing employment index for China. The manufacturing employment index shows employment changes from industrial companies. Supply managers respond to a survey about their employment situation, and the data collected is compared with other responses.
China’s Manufacturing Employment Index was 48.8 in May 2023, a 1.61% decrease from the previous year. It peaked in February 2023 with a value of 52.6 and then decreased till May 2023.
China Manufacturing Employment Index (2022-23)
As per The Financial Express, employment in manufacturing increased by around 5% between 2020-2021 and 8% between 2021-2022 in India. Approximately 8 million manufacturing jobs were created during these years to counteract the impact of the pandemic in 2020. However, the overall employment rates from 2020 to 2022 showed a general decline.
During 2020-21, the highest manufacturing employment growth was in the rural areas. This was due to the pandemic that brought about the subsequent loss of job opportunities. Workers were compelled to seek employment wherever it was available.
Growth Rate in Manufacturing Employment in India (2020-2022)
Source: Financial Express
A Statista report shows that India’s manufacturing sector’s employment declined from 2017 to 2018, then increased modestly till 2020. Due to the pandemic, it showed a sharp decline from 2020 to 2021, when many workers lost their jobs.
Number of Employed People in the Manufacturing Sector in India, in Millions (2017-2021)
According to an IBIS World report, around 11 million people in the US will be employed in the manufacturing industry in 2023.
A Statista report shows that employment in the private manufacturing sector has generally decreased from 1985 to 2010, after which it steadily increased till 2019. In 2020, employment sharply declined due to the pandemic and rose again in 2022.
Number of Private Sector Manufacturing Employees in the United States (1985 to 2022)
According to The Statista Research Department, Japan had around 7.7 million employees in the manufacturing sector in 2020. Food and transportation manufacturers had the largest share, with approximately 1 million occupations in each industry.
A FRED St. Louis report shows manufacturing employment data in Japan in recent years. In 2011, employment reached a record low, reflecting the aftermath of the global economic crisis. However, employment slowly increased till 2019, showing effective recovery, when it declined again in 2020 due to the pandemic.
Manufacturing Employment by Economic Activity, All Persons for Japan
Source: FRED St. Louis
The Statista Research Department published the total employment in the manufacturing industry in Germany. According to the data, the number of employees decreased by 4.43% from 2019 to 2020. There was an upward trend in employment from 2011 to 2019, which declined in 2020.
Total Number of Employees in Manufacturing in Germany (2011-2020)
Trading Economics data shows a sharp decline in manufacturing employment in Germany during the pandemic. Employment kept decreasing in 2021 but finally started rising in 2022.
Manufacturing Employment in Germany, in Thousands
Source: Trading Economics
CEIC Data shows similar trends in manufacturing employment in Germany. The following data contains employment rates for the mining and manufacturing industry. Employment increased marginally in 2022, then slightly declined in 2023.
Mining and Manufacturing Employment in Germany (2022-23)
Source: CEIC Data
CEIC Data released statistics in 2023 showing the manufacturing employment trends in South Korea from 2013 till current time. In April 2023, the value decreased to 4421 (in thousand persons) from 4463 in March 2023. Data shows an all-time high in 2016 with a value of 4673.
Employment Manufacturing in South Korea
Source: CEIC Data
A Statista report published in 2023 shows the growth rate in manufacturing employment in South Korea from 1990 till 2021. Rates drastically fell from 1996-98 but recovered quickly in 2000. Since then, data shows various fluctuations until 2021, with the growth rate increasing in 2004, declining in 2009, and rising again the following year. However, the manufacturing employment growth rate has been relatively low since 2016.
Annual Growth Rate of Employment in the Manufacturing Industry in South Korea (1990 to 2021)
Factors Affecting Manufacturing Employment Trends
1. Economic factors
The ever-changing economic state of the nation has a lasting effect on manufacturing processes and employment rates. Typically during economic expansions, a greater need for manufactured products means a high job vacancy. However, economic recessions reduce the demand for manufactured goods, leading to fewer employment opportunities.
Exchange rates also impact manufacturing employment rates, especially for international trade. A stronger currency makes exports more expensive, thus reducing manufacturing employment and vice versa.
2. Technological Advancements
Increased automation has minimized labor requirements, thus leading to a decline in job opportunities. As companies replace manual labor with automated processes, certain jobs are no longer needed. Thus, technology reduces employment rates in the manufacturing sector but increases them in other fields, such as programming, telecommunication, etc.
However, advancing technology and automation have numerous positive impacts as well. According to a Towards AI blog, automation has improved working conditions for physically demanding and dangerous jobs.
3. Trade and Government Policies
Agreements between governments and trade policies can affect employment levels in manufacturing. For example, certain companies may choose to outsource production to international companies with lower labor costs. This reduces job vacancies in one country but increases them in the other.
Government laws regarding manual labor, such as minimum wage and employee protection, can affect hiring decisions and job availability. Secondly, environmental policies can largely impact manufacturing processes and production costs, thus influencing employment rates.
4. Skills and Education
A skilled workforce is the backbone of all manufacturing-related fields. Hence, the level of education and training of workers can easily influence employment trends in manufacturing. Recent technological developments require workers to have updated skills and knowledge for operating machinery, programming systems, or analyzing different sets of data.
5. Competition within the Industry
Industry competition can, directly and indirectly, affect manufacturing rates. Companies strive to produce unique goods and develop new products, thus creating more job opportunities and increasing employment. However, certain companies that adopt advanced technology to gain the upper hand and improve their products lay off most of their employees.
Future of Employment in Manufacturing
1. Impact of Automation and Technology
In recent years, people have made groundbreaking technological advancements. While these advancements have brought many benefits, they have made a lasting impact on the overall manufacturing employment rates.
As Britannica has stated, the main advantages of automation in manufacturing are increased productivity, improved quality of products, reduced work times, and lesser need for labor. Since automated systems perform manufacturing tasks with less variability, they improve the consistency and quality of goods.
Automation ensures worker safety. By replacing or reducing the workforce, employees are protected against the dangers of the factory environment.
Along with increased productivity, automation saves costs for companies since more goods and services can be provided with fewer workers. As a result, the products are sold at lower prices to consumers.
The major setback of automation in manufacturing is worker replacement. Since machines are now doing the jobs, there is no longer a strong need for human employees in the industry. Thus, there has been a general decline in employment rates in manufacturing in recent years.
Advanced technology also requires big investments – another disadvantage. Equipment usually takes millions of dollars to be designed, fabricated, installed, and maintained.
2. Job Opportunities
According to the World Economic Forum, the Fourth Industrial Revolution will have changed 35% of skills currently crucial for the workforce.
The Fourth Industrial Revolution is digital and has progressed since the last century. It is a mix of technology and cyber-physical systems that are developing exponentially. Consequently, this revolution is bound to impact future job vacancies, especially those in manufacturing.
The Washington Post released an article exploring the future of jobs in manufacturing. Though automation is predicted to create more job opportunities in the future, it might cause a setback in the manufacturing industry. However, there are mixed opinions about this.
Automation and AI can only replace manual labor. Other useful skills like creativity, critical thinking, leadership, team coordination, emotional intelligence, and cognitive flexibility are only possessed by humans. Numerous jobs in manufacturing require these skills, especially in management.
So, although technology has taken over many manufacturing jobs, human labor is still a crucial part of the industry. By blending advanced technology with their work life, leaders and workers can benefit greatly from these advancements.
- Where are most of the manufacturing workers found?
China, the United States, Japan, and India are some of the top manufacturing countries in the world.
- Who is the biggest manufacturer in the world?
According to Zippia, Apple is the biggest manufacturing company in the world, with a revenue of $394.33 billion in 2022.
- How many manufacturers are in the world?
According to SCMO, there were an estimated 10 million factories worldwide in 2019.
This article highlights the employment trends in the manufacturing industry. It has various manufacturing jobs and is crucial for a country’s economic growth. It is the backbone of trade and opens up job opportunities while reducing poverty.
Manufacturing employment has decreased globally, mainly due to automation and technological advancements. However, there are still many job opportunities in this industry. Furthermore, more manufacturing jobs will be created in the future, although they will be fewer than in other sectors.