With 2018 nearly three quarters over, Staffing Industry Analysts reaffirmed its projection of 4% revenue growth for the industrial staffing segment in its biannual US Staffing Industry Forecast report published last week. Drivers of growth include record levels of employment in the temporary help industry (3.05 million workers in August according to the US Bureau of Labor Statistics) of which industrial occupations account for roughly half, along with continued evidence of wage and bill rate inflation. To cite one of many data points pointing to wage growth, TrueBlue’s PeopleReady division reported roughly 5% growth year over year in bill rates during the second quarter of 2018, driven by a similar rate of wage growth.

From a macroeconomic perspective, growth in the industrial staffing segment is being fueled by cyclical growth in the economy and aided by the stimulus of the Tax Cuts and Jobs Act that has contributed to expansion in the manufacturing sector. For a closer look at growth trends in manufacturing, we examine expansion rates in the manufacturing sub-industries shown in the table below.

Employment size and growth in manufacturing industries (Source: BLS)

click on chart to enlarge.

The manufacturing sector reached 12.7 million jobs in July, and has averaged 2.0% year-over-year growth during the first seven months of this year. As shown in the table, the four largest manufacturing industries have enjoyed outsized growth rates: food manufacturing (2.4%), fabricated metal products (4.0%), machinery manufacturing (3.8%) and computer and electronic products (2.3%). Within food and beverage manufacturing, job growth was particularly notable in seafood products (15.2%) and breweries and wineries (10.0%).

Not all manufacturing industries showed job growth, with areas of weakness notable in apparel manufacturing (4.8% year-over-year decline) and printing and related activities (1.6% decline).

Escalating tariffs between the US and major trading partners pose a downside risk to the manufacturing sector, and by extension industrial staffing suppliers. Nevertheless, industry contacts have yet to report adverse impacts to industrial staffing firms, and as the year draws to a close, 2018 remains likely to achieve a record market size for industrial staffing.

Corporate members of SIA can download the complete US Staffing Industry Forecast here.