Which Trends Are Hot in Manufacturing Right Now?

September 13th, 2017

While automation and connectivity are the bright, shiny objects being talked about all over the manufacturing world, there are big demographic trends emerging that could have much larger impacts than the latest bit of equipment to come down the pike.

Here is a look at a few trends that should affect manufacturers in the coming years.

A graying workforce

Industry experts often discuss the aging population and its effect on the workforce. This demographic change is particularly acute for manufacturing. The median age of the American worker is around 42 years old, while the median age for manufacturing workers is approaching 45.

With that being said, the United States is positioned favorably compared to the rest of the world. Fertility statistics paint a fairly rosy picture for the future of the American workforce, and our net immigration is higher than all other countries. While our society will keep on aging, it will do so at a slower pace than in other countries. According to a recent report by U.S. Census Bureau’s report, Europe has 22 of the oldest countries in the world. Japan is currently the oldest nation on the planet and will be through 2050. South Korea, Taiwan, and China are also aging quickly. China is projected to have 350 million senior citizens by 2050, around 27 percent of its overall population.

At the same time, the United States was ranked as having the 48th oldest population and was projected to drop to 85th by 2050, if current immigration policies are maintained.

Urbanization will continue

As global population growth drops and the planet gets older, populations are also becoming more concentrated in urban areas. In 2007, the very first time ever, a majority of people lived in urban areas, not rural regions.

Urbanization is a substantial manufacturing-related trend for multiple reasons. First, as populations become more concentrated, growing cities will need products like steel, cement, construction machinery and transportation equipment. According to a report by McKinsey, Chinese cities add 2.5 times the square footage of Chicago each year in residential and commercial space to meet the demands of growing urban populations.

Second, urbanization helps speed up productivity via geographic economies of scale. For manufacturers, urbanization cuts down on transportation costs by downsizing long supply chains and syndication networks, and by making certain that consumer products don’t have as far to go. By focusing the labor supply and factories, and by establishing highly-connected transportation networks, the quantities of goods and services generated in a given time can rise significantly.

Africa on the rise

Most experts anticipate Africa becoming a manufacturing center and a very productive continent within the coming years.

Africa is relatively young: The median age for the continent is 23, as opposed to 33 for the rest of the developing world. This will be highly beneficial for both the labor supply and consumer demand. By 2034, Africa will have the world’s biggest working-age population.

Furthermore, between 2000 and 2015, Africa experienced higher real GDP expansion rates than the overall world economy. While Africa is a small part of global GDP, its increasing economic expansion is making it ever more interesting as a manufacturing factor.

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At ZDA, we help companies stay on top of the latest trends and set themselves up for the future. Please contact us today to find out how a top supply chain recruiter can help your company.

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