Huge declines in tool and die employment

America's tool and die companies find themselves in an odd place. On the one hand, according to a Congressional report, one-third of all tool, die and mold businesses have gone under since 1998, according to a report done for the U.S. Congress by the Congressional Research Service. On the other hand, there's a shortage of experienced machinists.

All of this appeared on my radar Thursday as a I researched two stories printed in Friday's Inquirer -- one was a story about a tool and die company cited by OSHA and the other was a report on trade imbalances with China and how they affected jobs.

The jobs statistics in the report on the tool and die industry, are shocking, particularly in Pennsylvania. In 2001, according to the April report, 11,811 people were employed in tool, die and mold businesses. By 2010, employment  declined by 30 percent to 6,476.  Nationally, employment fell 45 percent, to 89,661 in 2010 from 162,032 in 1998. Obviously, the time periods don't match, but the trends are telling.

The recession was a huge factor, the report said. U.S. durable goods orders fell by 21 percent, pulling tool and die business down with it. U.S. auto production declined by 31 percent between 2006 and 2010, and auto production accounts for a huge percentage of the tool and die business. The national figures show the relationship between manufacturing and tooling companies. In the years between 1998 and 2010, manufacturing employed declined by 35 percent, while tooling employment dropped by 45 percent.  The number of manufacturing businesses dropped by 17 percent -- the loss in tooling businesses was double that, at 36 percent.

But it wasn't only demand that caused the problem, the report said. Foreign competition, particularly from China, has also taken a toll. China is emphasizing its auto industry, and as noted, auto manufacturing is a big user of tooling. It's all part and parcel of U.S. job loss resulting from trade imbalances with China, according to a report I wrote about in Friday's Inquirer. The Economic Policy Institute released the report Thursday. 

But here's what's odd -- employment is down, but there are shortages. That's because the job has gotten more complex. According to one survey, 95 percent of tool and die makers have job openings, despite the rough economy. Local manufacturers are concerned, as I have reported in the past.