The manufacturing sector has been expanding faster than the overall U.S. economy, which has led to job growth across the nation, but Kentucky is at the forefront of this positive trend. A recent report on the state's economic standing revealed that manufacturing is ahead of the game in terms of job growth within the state's borders. Economic experts are already predicting that 2015 will be a good year for the American economy, which is a pretty solid indicator that Kentucky will continue to see expansion. Original equipment manufacturers (OEMs) can take this advice to heart when planning for the year ahead. An increase in jobs will typically result from higher demand, and could create a need to refine lean manufacturing strategies.
Predictions for U.S. economy in 2015
With America poised for growth in the coming year, it should come as no surprise that the gross domestic product (GDP), which tracks all goods and services in the country, is expected to increase. NPR reported that Doug Handler, the chief U.S. economist for IHS Global Insight, predicted the GDP will jump 3 percent. The news source indicated is impressive given that the nation is still coming out of the recent recession. This essentially indicates that American consumers and companies will be spending more, leading to increased sales for OEMs. Higher demand for products could require more employees to keep factories on track. This could be a big part of why experts believe the unemployment rate will continue to fall in the new year.
"With stronger economic growth, the U.S. will add about 230,000 jobs per month on average next year," Gus Faucher, senior economist at PNC Financial Services Group, predicted, according to NPR.
Kentucky-based OEMs will benefit from growth
A recent report from the Kentucky Chamber of Commerce touched on various aspects of the state's economic standing, but perhaps the most interesting was the fact that manufacturing in the state has been outpacing the nation in terms of job growth over the past five years. This industry saw more than double the job growth (11 percent) compared to the nation as a whole (6.3 percent), and wages for Kentucky manufacturing employees have increased at a faster clip as well. The overall job growth within the state's borders did not surpass this limit. Kentucky had a 5.6 percent boost in jobs overall, but certain cities throughout the state fared well. For instance, Louisville saw a 7.9 percent growth in jobs overall, but had the highest growth rate of any city in the state for manufacturing jobs – 19.7 percent.
As more OEMs in the region bring in more employees, it will be essential for them to keep up with other industry trends. Lean manufacturing continues to be a major player, and numerous tools including business intelligence and mobile apps will prove useful in keeping OEMs current and competitive. With growing wages, manufacturing companies may need to make adjustments to their overall strategies to allocate the funding for their employees. For instance, outsourcing subassembly builds or seeking out a vendor managed inventory (VMI) program could reduce internal spending on supply chain management, freeing up a larger budget to put toward employment.
While cutting down on the on-site tasks at the factory may seem like it would result in fewer employees, OEMs could actually place staff in different positions along the supply chain, allowing them to focus more effort onto things like assembling the product, checking for quality and preparing it for shipment to clients. The end result would be a more efficient and reliable supply chain, which could help OEMs to save even more and reduce waste.