Manufacturing professionals face an ever-changing economic landscape, and understanding its nuances is critical to making informed decisions. On the latest episode of the Skillwork Forum, Tim Raglin and Brett Elliott were joined by Dr. Ernie Goss, a leading economist and professor at Creighton University. Dr. Goss shared his expert insights on the key economic trends shaping U.S. manufacturing in 2025. From workforce participation to the role of automation, here are the key takeaways from this engaging discussion.
The Economy in 2025: Strengths and Challenges
Dr. Goss opened the discussion by painting a realistic picture of the current U.S. economy. While the U.S. remains a global economic leader, there are warning signs manufacturers should not ignore.
He described the U.S. as the “healthiest horse in the glue factory,” outperforming regions like Europe and China. However, he cautioned against market overvaluation driven by excessive passive investment and “irrational exuberance.” For manufacturers, this means staying vigilant about economic fundamentals and preparing for potential volatility.
Workforce Participation: A Persistent Challenge
The conversation then turned to the ongoing labor crisis. Workforce participation, particularly among men aged 25 to 55, remains low. According to Dr. Goss, several factors contribute to this trend:
- Incentives Not to Work: Social benefits often disincentivize individuals from reentering the workforce.
- Skill Gaps: Increasing technical demands in manufacturing are leaving many workers feeling unqualified and discouraged.
“When you pay people more to not work than to work, what do they do? They don’t work,” Dr. Goss explained. He emphasized the importance of addressing these challenges to close the labor gap and strengthen the workforce.
Automation and AI: Embrace the Change
As technology evolves, manufacturers must adapt or risk being left behind. Dr. Goss highlighted how automation and artificial intelligence (AI) are reshaping the industry. While some fear automation will lead to job loss, Dr. Goss urged manufacturers to embrace these advancements and focus on retraining workers for higher-value roles.
“We must embrace automation and technology, not fear it,” he said, stressing that continuous retraining and upskilling are critical to ensuring workers remain competitive in this new era.
Manufacturing Employment Trends
Despite the strength of U.S. manufacturing, the sector lost approximately 90,000 jobs in 2024, with the Midwest accounting for 4,500 of those losses. Dr. Goss attributes this to the ongoing transition within the industry, as companies adapt to new technologies and global competition.
The key to reversing this trend? Embracing market competition, investing in upskilling employees, and fostering innovation. “Let the big dog run,” Dr. Goss stated, emphasizing the importance of a free-market approach to drive growth.
Key Takeaways for Manufacturers
Dr. Goss left the audience with a powerful message: the future of U.S. manufacturing is bright, but success requires adaptability. Here are the top takeaways from the discussion:
- Monitor Economic Trends: Stay aware of market signals and prepare for potential volatility.
- Invest in Workforce Development: Prioritize retraining and upskilling to meet evolving demands.
- Embrace Technology: Leverage automation and AI to enhance productivity and competitiveness.
- Foster Innovation: Compete on the global stage by producing high-quality products with skilled teams.
- Support Immigration Reform: Retain skilled international workers to address labor shortages.
Final Thoughts
The U.S. manufacturing sector faces both challenges and opportunities as it enters 2025. By embracing market competition, investing in people, and adapting to technological advances, manufacturers can thrive in this dynamic environment.
At Skillwork, we understand the importance of building a resilient and skilled workforce. If you’re looking for strategies to navigate these challenges, our team is here to help. Reach out to us today to learn more.