NAM Projects Manufacturing Job Losses Through 2010

The manufacturing sector lost nearly 2 million jobs over a 19-month period ending in July and isn't expected to add employment until 2011, according to the National Association of Manufacturers' annual Labor Day report.

The industry lost 1.96 million jobs between December 2007 and July 2009 primarily due to downturns in consumer durable purchases and housing.

NAM forecasts 65,000 additional job losses in 2010, down from the projected 1.6 million expected by the end of 2009. However, NAM expects production will increase by 6.4% in 2011 and 2012, leading to an employment increase of 399,000 and 426,000, respectively. NAM forecasts 89,000 manufacturing jobs created in 2013, remaining unchanged in 2014.

The industries with the greatest prospects for growth include machinery, fabricated metals, aerospace and other transportation, food and beverage products and chemicals. NAM projects employment will increase by 12% between 2010 and 2014 in these five industries, which accounted for one-half of manufacturing output in 2008.

Much of the growth will come from the chemicals, aerospace and food products industries, where employment is expected to exceed pre-recession levels. The machinery and fabricated metals industries will recover job losses incurred in the 2007 to 2010 period by 2014, according to the report.

Meanwhile, the computer and electronics sectors are expected to see employment declines exceeding 347,000 between 2007 and 2010, with an additional 201,000 job losses in the 2010 to 2014 period. The projected declines are attributed to an average 12.5% year-over-year increase in productivity over the past decade and a half.

NAM points out in the report that the outlook doesn't take into consideration legislative issues, including health-care reform, energy, taxes and regulations.

"There are grounds for optimism, but there is even greater reason for caution," said NAM President John Engler in a prepared statement. "A recovery could stall out or even shift into reverse if Congress and the administration enact policies that increase the burden on businesses and make us less competitive in the global economy."