Source: Supply Chain Management Review
Date: 20th January 2025

Data Indicates Ongoing Challenges in Workforce Availability Across Key Manufacturing Sectors

Labour shortages continue to impact U.S. manufacturing, even though the severity of the issue has moderated since its peak in 2021–2022.

Recent data from the Quarterly Survey of Plant Capacity Utilization (QSPC) shows that 20.6% of plants unable to operate at full capacity in Q3 2024 cited insufficient labour or skills. While this is less than half the record levels seen in 2021, it is still twice the pre-2017 average, indicating that the sector remains under strain.

Historically, such figures were more common during periods of strong industrial growth, suggesting that today’s labour challenges are not purely cyclical.

Labour constraints vary significantly by sector. While most industries report fewer labour shortages now compared to 2021, the picture is mixed when compared to 2018. For example, transportation equipment manufacturing has seen fewer labour issues, whereas the chemical sector is facing more constraints, likely due to increased capacity utilisation.

Petroleum and coal products remain an outlier, with labour shortages higher now than during the 2021 peak, mirroring continued growth in that segment.

The outlook for 2025 remains uncertain, with government policies—particularly around mass deportations—likely to affect workforce availability.

Food manufacturing, which employs over 1.7 million people and drives significant freight demand, is especially vulnerable due to its reliance on labour from at-risk populations.

As quit rates have plateaued and correlate closely with labour shortage metrics, analysts anticipate limited relief ahead. Instead, the risk of worsening labour constraints remains high, reinforcing the need for proactive workforce planning in the manufacturing sector.