Industrials: Labor Shortages Driving Innovation
Growing interest in industrial automation and autonomous vehicles during a tight labor market bodes well for the industrials sector.
With an unemployment rate of 3.9%, U.S.-based companies are forced to seek new pathways to enhance labor productivity. In the trucking sector, the problem is particularly acute, given a shortage of over 50,000 truckers, while the average age of existing truckers is 55. Likewise, 39% of Boeing (BA) technicians are aged 50 and up. During a recent meeting with management, Boeing touted the benefits of automation, which include higher quality (improvements of 50%), improved throughput (2 times faster on 737 wings), and decreased manual labor (80% manual on wings to 80% automation). Similarly, FedEx (FDX) recently discussed the limited deployment of fully autonomous forklifts in its highly automated sortation hubs.
Scott Pope does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.