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Labor Now Overrides Location as Prime Factor in Manufacturing Site Selections

Recently, in a survey of SIOR (Society of Industrial and Office Realtors) members, they named three major impacts on manufacturing in 2018. A majority of responders said labor was going to be the most important issue in the coming months. It's no longer just Location, Location, Location.
 
Here's the problem. According to the Bureau of Labor Statistics there are currently 400,000 open manufacturing positions across the country, and this is at a time when many counties and cities across the country, including the Midwest, have very low unemployment numbers, which makes it even harder to fill those jobs. Labor is a critical issue in the industrial sector. It's going to affect where companies locate, because when a company is looking at potential sites to relocate or open a new plant, they need to know that the positions can be filled by skilled workers.
 
Finding qualified workers is going to be a constant challenge. The work force is aging and fewer millennials are interested in getting into manufacturing.
 
The irony is, most of the new industrial jobs are tech oriented and these should all be of interest to millennials, probably the most tech savvy generation. Part of the solution is technical training and Wisconsin has spent several billion dollars in work force development over the past eight years.
 
Technology is the second most mentioned issue that will affect the industrial market in 2018 and all its underlying formats, from artificial intelligence to 3-D printing to robotics.
 
About 80 percent of manufacturing processes will have some kind of technology advancement in the next year. American industry is going through a "digital transformation," which is the hip phrase meaning change associated with the application of digital technology.
 
A third major impact is logistic, which has become more important especially on the consumer side of the business, where companies promise next-day deliveries to the doors of buyers.
 
E-commerce has put logistics into play, which is why consumer companies such as Amazon are building regional distribution buildings to be able to get goods to the consumer quickly. The sticking point, however, is not the international shipment of goods or even warehousing and distribution, it's the haul between port and distribution center or distribution center to consumers.
 
Trucking is the concern. New regulations, electronic log-ins, drivers aging out, are all issues. In December 2015, the federal government required all trucking operation to implement electronic logs-ins and that has created a driver shortage.
 
Other impacts on manufacturing include such topics as incentives, cost of development, strength of dollar, and the new tax bill.
 
Source: SIOR Report, Spring 2018
  
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