Workers in the Miami Valley and across the state are putting in longer work weeks than at any time since the Great Recession began as businesses respond to the growing demand for their goods and services.
Through the first nine months of the year, the average work week in Ohio expanded by more than a half hour to 34.4 hours a week, according to the latest figures available from the U.S. Bureau of Labor Statistics.
That was equal to the national average for October, but the national figure has remained essentially unchanged since the same time last year, according to the BLS.
The growing work week in Ohio — the biggest gain since 2007 — reflects an economy expanding faster than that of many other states and the nation as a whole, thanks primarily to resurgent manufacturing and energy sectors.
“Our revenues are at pre-downturn levels … and we’re working overtime,” said Dane Belden, president of The McGregor Metalworking Cos. in Springfield, which does metal stamping, machining and custom tooling for the automotive and transportation industries. “That’s a direct response to the bounce back in manufacturing.”
In fact, McGregor’s business has grown so fast over the past couple of years that the company was forced hire more workers to alleviate some of the pressure on its existing workforce, Belden said.
“We try to keep our overtime in a fairly narrow band because it becomes problematic for employees working so many hours in a week,” he said. “There’s a burnout factor to consider.”
Concerns about worker burnout represent a substantial change from just a few years ago when “guys were lucky to get in a 40-hour week,” said Joe Miller, director of operations at Process Equipment Co. in Tipp City.
“We don’t know what a 40-hour work week is anymore,” Miller said. “Most of our guys average between 50 to 55 hours a week, and we’re still trying to hire people and train people to keep up.”
Like many employers, executives at Process Equipment — which specializes in large-scale fabrication and machining — were cautious about adding to their payroll and waited until they saw sustained improvement in their business before they committed to hiring more workers.
“We don’t want to hire people and not keep them,” Miller said. “That’s why we increase hours first, and if demand keeps up, we start trying to hire people.”
The manufacturing work week historically has been one of the most reliable indicators of strength or weakness in the labor market, so much so that average weekly hours of production workers in manufacturing is designated as one of the nation’s 12 major leading economic indicators by the National Bureau of Economic Research.
The pick-up in manufacturing hours in Ohio might bode well for future employment in a state that has already seen unemployment drop at a faster rate than the nation as a whole.
At 7 percent in September, the unemployment rate in Ohio was nearly a full percentage point lower than the U.S. unemployment rate of 7.9 percent last month, as the BLS reported Friday. And the 88,000 jobs added through September ranked the Buckeye State No. 4 in the country for job growth.
And it’s not just manufacturers who are driving the gains.
“Our area of predominant placement is for managerial professionals,” said Kimmel Arn, managing director of Dayton-based Arn Associates Inc., an executive recruiting firm. “My business is up dramatically. I’m looking at my board, and I’ve got more orders now than I’ve had all year. But the decision time from presenting (an applicant) to hire is also dramatically slow.”
That’s another indication that employers in industries as varied as professional and business services to hospital administration are still squeezing as much out of existing workers as possible before they boost hiring significantly, said Tom Maher, president of the placement firm Manpower of Dayton, Inc., which conducts a quarterly survey of local employers hiring intentions.
“Most of our customers are definitely in a holding pattern,” Maher said. “If the demand isn’t there, it doesn’t matter what’s going on, they’re not going to hire anybody.”
Productivity, which measures hourly output per worker, increased at a 1.9 percent annual rate in the third quarter this year, the BLS reported, indicating most employers are using existing staff to keep up with demand and showing one reason why overall job growth continues to move at a slow-to-moderate pace.
On Friday, the BLS reported that U.S. employers added 171,000 people to their payrolls last month, and 84,000 more jobs were created in August and September than previously estimated. But that’s still well below the more than 200,000 jobs a month that most economists agree is needed to drive down unemployment significantly.
Still, the outlook continues to improve, based on Manpower’s latest employment outlook.
From October through December, 18 percent of local companies surveyed by Manpower said they planned to hire more workers, up 5 percent from the same period a year ago, the survey showed.
At the same time, 6 percent of local employers plan to reduce staff — down from 9 percent a year ago — and 72 percent of employers expect to maintain their current staffing levels, while 4 percent are not certain of their hiring plans.
“As we look at the final months of the year, employment prospects are trending slightly stronger,” Maher said. “Hiring plans are more optimistic compared to one year ago.”
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