Factory job cuts in the United States just hit COVID-19 and economic crisis levels. But manufacturing demand is also surging.
Factory jobs are getting cut at the highest level since the 2009 economic crisis and the COVID-19 shutdown, economists reported. But manufacturing demand accelerated at its quickest pace in five months.
It puts plants at a crossroads of fewer jobs and higher demand. And it’s concerning to the economist who monitors this data.
According to the S&P Purchasing Managers’ Index (PMI), which tracks the health of the manufacturing and service sectors, employment in manufacturing fell for a second month in June and for a third time in the past fourth months. Companies continued to focus on cost reduction amid higher prices and a scary outlook. Manufacturing headcount were cut at the fastest rate since the COVID-19 lockdowns in early 2020.
“Most worrying was the further fall in employment, notably in the manufacturing sector,” said Chris Williamson, chief business economist at S&P. “Factory job cuts are running at the highest since 2009 if the pandemic is excluded, reflecting concerns over the sustainability of the recent upturn in demand alongside worries over the escalating cost of raw materials. However, while still running at one of the highest rates seen over the past four years, input cost inflation has shown signs of cooling in June, thanks in part to the lower energy prices seen at the tail end of the survey data collection period.”
Manufacturing demand remains strong
Despite these jobs cuts, manufacturing demand remains strong. The S&P Global US Manufacturing PMI rose to 55.7 in June from 55.1 in May. A reading above 50 indicates expansion. This marks the highest reading since May 2022. The numbers indicate that factory business conditions have improved continually since last August.
Production growth accelerated to the fastest since July 2021 as new orders showed the largest rise since April 2022. Input inventories posted the largest rise since May 2025, and the second steepest in the survey history.
Williamson said he remains concerned since factory growth is being temporarily bolstered by inventory building and supply fears.
Even though a lot of the growth is fueled by front-loading orders, manufacturing has been doing more with less for a while. Skilled labor remains in short supply, even as demand for manufactured goods climbs. And although automation seems like a cure-all, only 20% of manufacturers are prepared to scale automation. It begs the question: How are plants doing more with less?
