Economy-wide breakdown
- The fourth quarter of 2024 fueled hopes for strong labor market growth in the new year. While October’s jobs report fell significantly below expectations due to the impact of Hurricane Milton, November and December exceeded forecasts. Over the past three months the job market has grown at a respectable average of 170,000 jobs—an encouraging sign given the backdrop of still-high interest rates.
- While overall job growth remains steady, the labor market is a far cry from the peaks in the early 2020s, which led to the “Great Resignation”. Now, fewer workers are quitting their jobs, leading to fewer backfill openings and ultimately driving down the hiring rate. Despite this slowdown in quitting and hiring, layoffs have not risen significantly, creating a relatively stable environment for those currently employed.
- For workers with jobs, this means consistent wage growth and a moderate selection of open positions to explore. However, the picture is less optimistic for unemployed workers. The labor market has become increasingly challenging, with the job-finding rate—the percentage of unemployed workers securing jobs each month—declining steadily over the past six months.
- As we look ahead to 2025, steady labor market growth is expected to continue. However, policy uncertainty under a new administration will be a critical factor in shaping the trajectory of the labor market. Decisions on fiscal and monetary policy, as well as regulatory changes, could significantly influence hiring, wages, and overall economic momentum in the year ahead.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
Manufacturing struggled in 2024, posting job growth in only four of twelve months. This weakness can largely be attributed to two key factors: a strong U.S. dollar, which makes exports more expensive for foreign buyers, and elevated interest rates, which have crowded out private investment.
A key metric for gauging the health of the manufacturing sector is the Purchasing Managers Index (PMI), which tracks data on orders, investments, and overall activity. For the past six months, the PMI has remained below 50, signaling that the industry is in contractionary territory, or shrinking.
What does 2025 hold for the sector? There are reasons for cautious optimism. First, interest rates are now a full percentage point lower than their peak, easing financial pressures. Second, the new presidential administration aims to revamp industrial policy, including levying tariffs on key trade partners such as Canada, Mexico, and China. While this approach may boost domestic production in the short term, it could also disrupt supply chains and increase costs, leaving the long-term effects uncertain.
Overall job growth in manufacturing for 2024 was consistently negative, with the industry losing jobs at an average rate of 13,000 per month over a three-month rolling average. While a miraculous rebound in job growth is unlikely in the new year, looser financial conditions, including lower interest rates, could provide some much-needed breathing room for manufacturers, potentially stabilizing the sector.
Among manufacturing subsectors, growth in 2024 ranged from mildly positive to significantly negative. Food and transportation equipment plants managed to grow at a respectable pace of 0.8% and 0.3%, respectively, in December, compared to the year before.
In contrast, machinery manufacturers saw job losses of -0.9%, while computer part manufacturers faced even steeper declines, with employment down more than -1.6%.
Wage Trends
While employment growth in manufacturing has been sluggish, wages have continued to rise across all subsectors, with growth exceeding 4%. Workers in computer and electronic product manufacturing have seen their wages surge by a record 13.4%, marking an all-time high for the sector. Similarly, machinery and transportation equipment manufacturing workers are enjoying robust wage growth of over 7%, while food manufacturing workers have experienced a respectable increase of 4.7%.
Opening and Turnover Trends
The overall rate of job openings across manufacturing has declined significantly over the past two years, now standing at 3.4%, just slightly above its pre-pandemic average of 3%. This decrease in openings is partly due to a drop in the quits rate to 1.5%. As fewer workers leave their positions, the need to backfill roles with new requisitions has diminished, contributing to the decline in the hiring rate, which is now at 2.5%.
Despite weaker hiring demand and lower overall attrition, layoffs remain exceptionally rare, holding steady at 1%, highlighting the relative stability in existing manufacturing jobs.
Recruitment Marketing Trends
The term “long” or “ATS apply” refers to the conventional application process, requiring applicants to manually submit their tailored application documents and personal details through the company’s website or an applicant tracking system (ATS). In many cases, applicants are required to create a company-specific account.
On the other hand, “easy apply” refers to a swift application process on a job board, often conducted through a smartphone. With a single click, essential information like the resume is transmitted directly to the company. Due to the simplicity of this application method, easy-apply metrics are not directly comparable to those of the “long” or “ATS apply”. The metrics are therefore presented separately.
Long Apply
With the ongoing weakness in hiring demand in manufacturing, it’s clear why recruiting costs have dropped so significantly: fewer job openings and more job seekers competing for those roles. The median cost-per-click in the industry remained just under $0.90 throughout the year, while the median cost-per-application fell below $13, marking its lowest point since 2022.
Easy Apply
Like the trend of lower costs for traditional apply methods, easy-apply costs have also come down. The median CPC did rise slightly towards the end of the year at $0.92, but CPAs remain ultra-low at $3.04. This is driven by strong apply rates, above 25%.
Recruitment Marketing Forecast
While recruitment costs in manufacturing have steadily declined over the past four years, our forecasts suggest that this trend may slow in the coming year. With interest rates easing and new industrial policies set to take effect, the sector could enter a renewed era of competition for workers.
What does this mean for recruiting in Manufacturing?
The manufacturing sector faces a pivotal moment as it navigates weaker hiring demand, declining recruitment costs, and ongoing labor market challenges. While job growth has been sluggish and job openings have decreased, easing interest rates and new industrial policies could spark renewed competition for workers, potentially reversing the decline in recruitment costs. This suggests that while the sector remains under pressure, improving financial conditions and policy shifts may offer opportunities for stabilization and recovery in the year ahead.
Forecasting Methodology
Cost-per-application (CPA) is forecasted two quarters ahead using the previous two years’ worth of one-month moving average data. A combination of ARIMA, exponential smoothing, and seasonal naïve models are used to create an ensemble forecast. The forecast provides both the 95th percentile confidence intervals, indicating the likelihood that each value will be within the CPA range provided.
