Skills gap in U.S. manufacturing less pervasive than many believe, study finds

A new study could give hope to the Canadian manufacturing sector if it follows trends from the United States. The study has found the skills gap in U.S. manufacturing today is more limited than many people believe and is unlikely to prevent a projected resurgence in U.S. manufacturing by the end of this decade.

 Still, more severe shortages could develop, threatening to constrain that revival, unless aggressive steps are taken now, according to the study by The Boston Consulting Group (BCG).

BCG estimates that the U.S. is short some 80,000 to 100,000 highly skilled manufacturing workers. That shortage represents less than 1 per cent of the nation’s 11.5 million manufacturing workers and less than 8 per cent of its 1.4 million highly skilled manufacturing workers. What’s more, only seven states – six of which are in the bottom quartile of U.S. state manufacturing output – show significant or severe skills gaps. The shortages are local, not nationwide, in nature and reflect imbalances driven by both location and job classes.

“Shortages of highly skilled manufacturing workers exist and must be addressed, but the numbers aren’t as bad as many believe,” Harold L. Sirkin, a BCG senior partner and coauthor of the research, said in a statement. “The problem is very localized. It’s much less of an issue in larger communities, where supply and demand evens out more efficiently thanks to the bigger pool of workers.”

The analysis supports the firm’s estimate that rising U.S. exports — combined with production brought back or “reshored” from China – could create 2.5 million to 5 million U.S. jobs in manufacturing and related services by the end of the decade. The study has also shown that the U.S. could capture up to $130 billion in exports from other nations by 2020, thanks largely to significant labor- and energy-cost advantages over Western Europe and Japan and to rising costs in China.