Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
      • 2023 winners
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Bioplastics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
April 12, 2023 08:08 AM

Data shows plastics' chronic labor shortage abating

Bill Wood
Economics Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    PennStateBehrend-main_i.jpg
    Penn State Behrend
    A job fair at Penn State Behrend.

    According to the latest Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics, the total number of nonfarm job openings fell to a seasonally adjusted level of just over 9.9 million in February. This is the second consecutive monthly decline in this data, and it is significant for several reasons.

    The February reading marked the first time since May 2021 the number of openings dropped below 10 million. As you can see on the chart, the number of openings peaked in March 2022 at just over 12 million. That means in just the past year, the number of openings has declined by 17 percent.

    At the peak, there were more than two openings for every unemployed worker in the U.S. As of this past February, the ratio had fallen to close to 1.7 jobs for every worker.

    I have been analyzing economic data for a long time, but I am happy to say there are still times when a chart can make me say "wow." A couple of years ago, if you had told me the number of job openings shortly after the pandemic would surge to 12 million, and that this would represent an openings-to-workers ratio of greater than two to one, then I would have assumed you had partaken in too much recently legalized cannabis. And I could never have imagined a scenario in which a year-over-year decline of 17 percent in the total number of openings would one day actually be considered a good thing.

    Yet here we are. Job openings are declining rapidly, which means the sharp rise in the Fed's interest rates is having at least some of the desired effect, which means the rate of inflation should also continue to decline.

    But the biggest questions still remain: How far and how fast will this data fall this year? And what will the rest of the economy look like when this trend hits bottom? All I can say is stay tuned.

    For plastics processors, there are some interesting clues to be gleaned about the possibilities for the future tucked away in the breakdown of the aggregate data. For instance, the total number of job openings in the manufacturing sector declined to about 694,000 in February. This data peaked in April 2022 at just over 1 million openings, so in the 10 months since then, the total number of openings for manufacturers has dropped by 32 percent. During the two decades before the pandemic, this data series averaged around 350,000 openings per month.

    The manufacturing data can be broken down further into durable and nondurable goods categories. The decline in openings for durable goods manufacturers since last April's peak has been 25 percent. For reference, the number of job openings for durable goods manufacturers over the past 20 years has averaged around 200,000. The data dropped down to 151,000 during the shutdown in March 2020, then it spiked up to 631,000 in April 2022. As of this past February, there were still 475,000 job openings listed in the durable goods sector and the downtrend has been moderate in recent months.

    Surprisingly to me, the volatility in the job openings data out of the nondurables sector has been more extreme. I always think of the trends in the nondurable goods sector as being much less cyclical than those in the durable goods categories. But according to BLS, the number of job openings for nondurables manufacturers peaked in May 2021 — almost a year before the peak in the rest of the economy — at 400,000 jobs. In February, there were 219,000 jobs listed, a drop of 45 percent from the peak.

    Prior to the pandemic, the number of openings for nondurables manufacturers averaged around 150,000 per month. This data exhibited no decline during the shutdown and then quickly elevated to its peak within about a year. All of that voracious demand for toilet paper, hand sanitizer and personal protective equipment is clearly evident in this data series.

    OK, that's a lot of numbers, but what does that mean for the U.S. economy and the plastics industry going forward?

    Perhaps you are already familiar with the phrase "too much money chasing too few goods" as a way to describe the cause of rising inflation or, to be more precise, demand-pull inflation. If you have not heard this phrase before now, then let me introduce it to you because it certainly describes the situation in the U.S. economy for the past two years.

    The trillions of dollars of pandemic-induced stimulus payments, pumped into an economy that had operated for over a decade in an environment of negative real interest rates, created the huge surge in demand-pull inflation we experienced in 2022.

    This environment also created a situation of "too many employers chasing too few workers." This resulted in upward pressure on wages and salaries across the board, and there are some other, next-order trends gaining momentum that will affect the future.

    For some segments of the economy, we have seen much stronger leverage exerted for expanded benefits packages and other more worker-friendly arrangements. In other segments, it increased demand for more automation. And there are still segments that are woefully undermanned (e.g., construction).

    In summary, I will say that we are closer to a healthy equilibrium in the U.S. labor market than we were a year ago, but we still have a long way to go. How long it takes us to get there — and whether the Fed and the other policymakers can facilitate getting us to this equilibrium without creating another big crisis — is still an open question.

    The pressure on plastics processors generated by the chronic labor shortage will continue to abate in the coming months. This will come from a gradually improving situation in the labor market, but for many, it will also come from a decrease in demand from their end markets.

    RECOMMENDED FOR YOU
    Treaty talks end with plans for a draft agreement, but hurdles remain
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Debate exposes divisions in plastics treaty talks
    2
    GM, Stellantis give $15M lifeline to insolvent supplier
    3
    PVS Plastics expanding in Tennessee, Ohio
    4
    Ohio recycler Return Polymers triples PVC recycling capacity
    5
    Plastics additives one focus in Paris treaty talks
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
          • 2023 winners
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Bioplastics Live
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified