Manufacturing Challenges and Opportunities – New Jersey Business Magazine


Manufacturing has become one of New Jersey’s fastest growing industries, growing 5.6% annually since 2018 and contributing more than $54 billion (about 10%) to the economy state last year. And, while factories are concentrated in the state’s most populous cities, including Paterson, Newark, Jersey City and Elizabeth, production is spread across all 21 counties and includes more than 11,000 companies and 250,000 employees.

However, these positive figures come against a backdrop of persistent challenges for the sector.

There are issues with the supply chain – made all the more glaring by COVID-19 – as well as rising interest rates, inflation, a possible recession and difficulty in competing with China in the microelectronics and other fields. Underscoring all of this are complex and long-standing labor shortages, which can be traced to a culture that has long steered young people away from industrial careers in favor of a college education.

“We’ve let the pipeline dry up and dissipate, and that’s led to about 40,000 open manufacturing jobs in New Jersey right now,” said John Kennedy, CEO of the New Jersey Manufacturing Extension Program (NJMEP), a non-profit organization. organization dedicated to improving the profitability and competitiveness of New Jersey manufacturers.

According to Paul Schindel, director of the New Jersey and Eastern Pennsylvania chapter of the National Tooling and Machining Association (NTMA-NJPA), COVID-19 has done little to slow down manufacturing in the New Jersey and, in fact, shone a spotlight on the dire need for workers. “Everyone is looking for additional employees, and everyone has more work than they can handle. Our members have all these orders and don’t have enough staff and hours per day to run the equipment and deliver the parts,” he says.

To meet this growing need for skilled manufacturing employees, organizations such as the New Jersey Business & Industry Association (NJBIA), NJMEP, and NTMA have worked with legislators, chambers of commerce, and institutions of higher education to attract more talent. For example, the New Jersey Community College Consortium for Workforce and Economic Development has introduced a manufacturing and supply chain management track that includes apprenticeships and registered internships that can lead to permanent positions.

There are also a variety of learning bills pending before the Senate Budget and Appropriations Committee aimed at helping more students get into skilled jobs, and the Education Manufacturing Act. college, which requires state entities to promote student career paths and provides assistance to the manufacturing industry, passed unanimously in the New Jersey State Senate in June.

“This fall, we plan to work with our Assembly partners to hopefully get the bill across the finish line and take a big step forward in addressing this long-standing need,” said said Sen. Mike Testa, co-chairman of New Jersey Manufacturing. The Legislative Caucus, which is also trying to pass a bill to expand manufacturers’ eligibility for tax credits and help businesses improve indoor air quality. “The goal is to remove bureaucracy, barriers to entry and barriers to success.”

The CHIPS law

On August 9, President Biden signed the CHIPS Act, a bill that provides more than $52 billion for U.S. companies producing computer chips, plus billions more in tax credits to spur investment in technology. chip manufacturing. It also provides tens of billions of dollars to fund scientific research and development and to increase innovation and development of other American technologies.

“New Jersey is already a strong technology and manufacturing hub,” said Senator Linda R. Greenstein, also co-chair of the New Jersey Legislative Manufacturing Caucus. “Incentives provided through the CHIPS Act are likely to strengthen this position by boosting the state’s manufacturing industry. It could also help address supply chain issues that have hampered the deployment of production projects. of solar electricity across the state.

In 1990, the United States produced 37% of the world’s computer chips; now that number is just 12%, with 75% of semiconductor manufacturing capacity concentrated in China and East Asia.


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