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MRT Insights

May 2, 2025

Can Manufacturing Withstand?

U.S. Manufacturing in 2025: Facing the Services Boom and a Talent Crunch

Despite recent economic strength, manufacturing’s share of the U.S. economy remains small. By one estimate, nearly 79% of U.S. jobs are in services, while manufacturing employs only about 10–11% of workers​. In 2023, manufacturing output was roughly $2.3 trillion, about 10.2% of U.S. GDP. This service-sector dominance was a major theme of an April 2025 Wall Street Journal analysis, which noted that a booming services economy is squeezing the factories. In practical terms, many companies are seeing limited growth in factory output and a shrinking slice of the labor market as more Americans work in healthcare, finance, retail, and other service fields.

Modest Output and Flattening Employment

Recent data suggest manufacturing is essentially flat. U.S. industrial production fell slightly in early 2025, reflecting weak utility output and inventories​. By March 2025, overall industrial production was down 0.3%, even as factory output increased about 0.3%​.  Employment is steady but not growing rapidly- about 13 million Americans work in manufacturing today. ​In short, factories aren’t adding many jobs, and service-sector hiring far outpaces manufacturing hiring, leaving factories “squeezed” in the economy.

Workforce Shortages and an Aging Labor Pool

A key challenge for manufacturers is labor. Even as job openings slow, talent shortages persist. In a late-2024 industry survey, nearly 60% of manufacturers cited “inability to attract and retain employees” as their top concern. These workforce constraints are driven by demographics and skill gaps. A disproportionate share of current factory workers are nearing retirement: one analysis finds a “significant portion” of manufacturing employees are over age 55​. As baby boomers exit the workforce, many industries face shrinking labor pools. Without enough young workers or new immigrants to replace them, some studies warn of a manufacturing labor shortfall. For example, the Manufacturing Institute and Deloitte project that 3.8 million manufacturing jobs will open by 2033, but roughly 1.9 million of those could go unfilled due to retirements and lack of entrants​.

These shortages are especially acute in skilled trades and technical roles. Many advanced manufacturing positions now require specialized credentials, yet the training pipeline is limited. As one analysis notes, “advanced manufacturing jobs increasingly require post-secondary technical education or certification,” but regions report few graduates with those skills​. In practice, this means gaps in roles like machinists, CNC operators, maintenance technicians, and engineers. Without a steady influx of qualified applicants, even stable output means continuous hiring pressure.

Skill Gaps in High-Tech Manufacturing

Within manufacturing, high-tech and niche sectors show mixed trends. Some emerging industries continue to grow, while traditional product lines lag. For example, analysts expect increased production and capacity utilization in 2025 for industries like semiconductors, electric-vehicle batteries, and clean-energy equipment​. However, these very sectors report acute labor constraints. One expert notes that “advanced manufacturing subsectors such as semiconductors, aerospace components, and EV battery production are particularly labor-constrained,”​. Even in plastics – a well-established niche – trade publications highlight a looming skills crunch. The Plastics Industry Association predicts higher output next year, but observers warn that the “skilled labor shortage will worsen,”​.

Hiring Implications: Planning for the Crunch

These trends have clear hiring implications. With talent in short supply, manufacturers can’t rely on informal recruiting. Instead, industry experts advise strategic workforce planning and targeted recruiting partnerships. Firms must proactively build talent pipelines through apprenticeships, retraining programs, and STEM outreach. For example, one analyst urges manufacturers to invest in their workers, upskilling current employees and running apprenticeship programs, to prepare for future needs. Many companies also turn to specialized staffing agencies that focus on manufacturing roles. Such recruiters understand niche skills and can tap hidden labor pools, especially attracting passive top talent that is not always looking, which generalist recruiters might miss. In a tight market, even posting jobs broadly often isn’t enough; manufacturer clients increasingly partner with engineering and technical recruiters to find welders, mold operators, automation technicians, and similar specialists. Industry surveys confirm that talent-supply issues cannot be solved by short-term measures alone​.

Key 2025 hiring trends are summarized below:

Trend / Indicator2025 Outlook / Data & Source
Total manufacturing jobs≈12.9–13.0 million employed (≈10% of U.S. workforce)​
Projected demand~3.8 million factory openings by 2033 – with ~1.9M shortfall if nothing changes
Unfilled positions (2030)≈2.1 million U.S. manufacturing jobs may go unfilled by 2030 due to skill shortages
Skill gapsSevere shortages in skilled trades (machinists, welders), automation, and digital roles; advanced jobs need tech degrees
Aging workforceA large share (~25%) of workers age 55+, fueling retirements and turnover
Recruiting difficulty~60% of manufacturers cite talent attraction/retention as top challenge

Overall, these factors mean manufacturers must hire more strategically. Simply raising wages may not attract the right candidates unless paired with brand-building and skill development. For leadership teams, the advice is clear: anticipate openings, refresh recruitment pipelines, and work closely with specialized recruiters who know the industry. In-demand skills (such as CNC programming, robotics, quality engineering, and process controls) often require outreach beyond standard job boards. By contrast, firms that ignore the crunch risk falling further behind as competitors and the broader economy snap up the limited talent pool.


Our company has been a leader in manufacturing staffing for nearly four decades, and our experienced recruiters are available to develop custom hiring plans for niche and high-tech roles.

Citations

Industrial production declined in March

https://kpmg.com/us/en/articles/2025/march-2025-industrial-production.html

2025 Manufacturing Industry Outlook | Deloitte Insights

https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-industry-outlook.html

The Current State of the U.S. Labor Market and Capacity to Support Manufacturing Growth – New Space Economy

https://newspaceeconomy.ca/2025/04/21/the-current-state-of-the-u-s-labor-market-and-capacity-to-support-manufacturing-growth/

The State of the Manufacturing Workforce in 2025 – NAM

https://nam.org/the-state-of-the-manufacturing-workforce-in-2025-33321

Bridging the labor gap in US manufacturing.

https://manufacturing-today.com/news/bridging-the-labor-gap-in-us-manufacturing/

The Known Unknowns Confronting the Plastics Industry in 2025

https://www.plasticstoday.com/industry-trends/the-known-unknowns-confronting-the-plastics-industry-in-2025

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