Index Forecasts Sharp Decline in April Manufacturing

SHRM/Rutgers Leading Indicators of National Employment also finds that wages for new hires in manufacturing rose slightly in 2007.

Hiring in the manufacturing sector will decline sharply in April 2008 compared with one year ago according to the latest numbers from the SHRM/Rutgers Leading Indicators of National Employment (LINE). The LINE report is a collaborative effort between the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations.

The report also found that increases in wages for new hires in the manufacturing sector rose slightly in March compared to one year ago.

"The job slow-down seen in March will continue in April across both the manufacturing and service sectors," said Jennifer Schramm, SHRM manager of workplace trends and forecasting. "The good news is that employers across sectors are having an easier time finding highly qualified new workers," said Schramm. "The recruiting difficulty index dropped sharply for both sectors to their lowest levels since each series was initiated."

Finding from the report include:

  • The LINE index of manufacturing employment expectations dropped 10.7 points compared with April 2007. This index declined from 49.7 in April 2007 to 39.0 in April 2008.
  • A look at exempt and nonexempt vacancies shows different patterns than reported a year ago. Employers reported a marginally lower vacancy rate index among exempt manufacturing jobs for March, the month leading into the April forecast -- 16.3 during March 2007 compared with 15.7 in March 2008.
  • The March 2008 vacancy rate index of nonexempt manufacturing jobs is substantially lower than it was in March 2007 -- 10.5 compared with 16.2.
  • The April 2008 LINE recruiting difficulty index plunged from March 2007 -- 24.2 in March 2007 compared with 3.4 in March 2008. The recruiting difficulty index is at its lowest level since tracking began in 2004.

Compensation rose for new hires in the manufacturing sector. as the new-hire compensation index for March 2008 increased to 8.7 from 5.5 in March 2007.

The SHRM/Rutgers LINE indicator of employment expectations provides an early snapshot of anticipated U.S. hiring for the same April time period as the report the BLS will release in May. The monthly report forecasts changes in national employment by surveying human resource professionals at more than 500 manufacturing and 500 service sector firms.

To view the full report, visit www.shrm.org/LINE.

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