Labor Shortages Slowing Growth, Manufacturers Say

Engineers discuss at a CNC machine

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Manufacturers remain optimistic about demand for their products these days—but finding enough workers to fill that demand continues to be another story, as supply chain woes keep plaguing the U.S. economy.

Manufacturing companies saw more workers quit in April compared to March, and fewer companies made progress towards meeting their staffing targets, a monthly survey of supply chain executives showed Monday. Orders grew but at a slower pace, with a notable slowdown in export order growth. Overall, the Institute for Supply Management’s index measuring activity in the manufacturing sector fell to its lowest level since July 2020, below what economists had anticipated and indicating a slower pace of growth.

“In April, progress slowed in solving labor shortage problems at all tiers of the supply chain,” said Timothy R. Fiore, chair of the Institute for Supply Management, in the report.

Those labor shortages and supply chain problems have helped drive inflation to its highest level in four decades, and there was little sign of relief from higher prices in Monday’s report. 

“So, not a good month for manufacturers,” said Jennifer Lee, senior economist at BMO Capital Markets. 

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  1. Institute for Supply Management. "April 2022 Manufacturing ISM® Report On Business."

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