Labor Scarcity Impacts On Manufacturing Site Selection
This is the first in a series of posts about siting advanced manufacturing facilities created through a collaboration between NextGen Industry Group and JLL. Thank you to Greg Matter, Executive Managing Director and Joel Woodmass, Location Intelligence & Labor Analytics for their contributions to this content. Stay tuned for more!
Manufacturing is booming in the US as construction starts for production facilities have tripled in the past decade. New jobs are being created across the country and our labor force is beginning to adapt to a digital-first manufacturing approach. However, to sustain this new era of advanced American manufacturing, we need to leave the post-WWII mindset and learn new lessons – especially when it comes to where we locate new factories.
In fact, most advanced manufacturers don’t start by breaking ground on a factory. Instead, they require multiple years of R&D and extensive piloting before they are even ready to consider a full-blown production facility. Siting a facility for each step of the journey requires a holistic approach that applies a granular analysis to solve for both short-and long-term objectives.
What We Are Seeing
Where Manufacturers Are Going
Digging deeper: Observations on advanced manufacturing location decision making
Successful manufacturers who understand the complexities of site selections and the role of labor consider the following themes in their analyses.
Challenges Arise
Every new manufacturing announcement diminishes the available labor pool in a market. Each location decision is unique, and although sites in these high-demand regions may still work for some, manufacturers should be aware of the challenges and be willing to consider alternatives.
“It’s important to understand the total picture and dig deeper while evaluating markets. Every manufacturing announcement changes the calculus for location decisions as constraints in one market may open new opportunities in locations previously not identified.”
Conclusion
It is an exciting time as we build the future of American advanced manufacturing. As our manufacturers scale, we need to remain open to learning new lessons to ensure this wave is sustained over a very long-time period. Facility siting decisions are critical at each stage of growth and require deep and granular analyses that seek to balance short- and long-term objectives. Making wise decisions now creates a pathway to successful outcomes for both labor and manufactures in the future.
About JLL
JLL (NYSE: JLL) is a leading global commercial real estate and investment management company. With operations in over 80 countries and a workforce of more than 108,000 employees, JLL combines global reach with local expertise to deliver innovative solutions and shape the future of real estate for a better world. For more information, please visit our website at https://www.jll.com.
