The 40-year decline of manufacturing | Local company

Nationally, manufacturing employment has been declining for 40 years, according to a 2020 study from the U.S. Bureau of Labor Statistics.

Despite being a key driver of job growth for decades, manufacturing has lost jobs over the past 40 years as the U.S. economy shifted to industries services, according to the study.

In June 1979, manufacturing employment reached an all-time high of 19.6 million. Forty years later, in June 2019, employment stood at 12.8 million, down 6.7 million or 34% from the all-time high, the agency reported. Since 1979, employment has fallen in each of the five recessions, and in each case employment has never fully recovered to pre-recession levels.

“The decline in the share of employment in manufacturing has coincided with employment growth in service industries, including professional and business services, education and health services, recreation and hospitality,” economist Katelynn Harris wrote in the report.

Harris concluded that in the 40 years since the peak of manufacturing employment, the industry has struggled to regain the prominence it once had.

Notable job losses occurred in the manufacturing of durable goods, particularly fabricated metals and machinery, as well as computer and electrical products. Within non-durable goods manufacturing, the garment and textile industries suffered dramatic job losses, while food manufacturing was the only industry to add jobs.

Harris noted that there were more recessions before the employment peak (seven) than after the peak (five), manufacturing failed to recover from cyclical losses after June 1979 and led to a loss net of 34% over 40 years after its peak.

While Lancaster County has followed a similar path, the outlook for the future differs.

A 2021 report from the Lancaster County Economic Development Corporation indicates that manufacturing in Lancaster County is expected to hold steady at its employment base of 37,000, growing 0.2% over the next 10 years. Manufacturing contributes 19% of Lancaster County’s GDP and 15% of its workforce, according to EDC.

The stability projected for the future runs counter to manufacturing trends in Pennsylvania and the United States, where manufacturing employment is expected to contract slowly over the next decade.

Private equity has been active in manufacturing for years, but has become more visible as more companies have entered the arena.

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