Economics and engineering careers

There has been grim news on the manufacturing front: Total orders in September declined 2.5% after a 4.3% drop in August, with non-durables falling 5.5% (the biggest drop in two years); and though factory inventories decreased 0.7% (the biggest decline in five years), the drop in demand caused the inventory-to-sales ratio to rise to 1.

12/01/2008


There has been grim news on the manufacturing front: Total orders in September declined 2.5% after a 4.3% drop in August, with non-durables falling 5.5% (the biggest drop in two years); and though factory inventories decreased 0.7% (the biggest decline in five years), the drop in demand caused the inventory-to-sales ratio to rise to 1.29 months from 1.26 months in August. But there has also been good news, and much of it points to 2009 being a rebound year (though many experts predict that won’t happen until late in the year).

One significant item of importance can be found in a recent release from the Industrial Research Institute (IRI), which notes that R&D investment by the top 1,000 U.S. R&D firms (including Pfizer, Johnson & Johnson, Microsoft, GM and Ford) rose by 9.9% in 2007. “IRI member companies understand the necessity to fund R&D even through trying economic times,” said IRI President Edward Bernstein.

Such R&D spending retention bodes well for engineers. “Most manufacturing engineering functions have already been cut to the bone, and you need that engineering core to come to market with new and emerging technologies,” says Clint Adamkavicius, Frost & Sullivan’s senior manufacturing research analyst. One possibly contentious area that Adamkavicius sees as holding potential for helping U.S. manufacturers through the downturn and into the next upswing is second-level branding—creating products under different brand names that are similar to a company’s main products, but made with lesser-quality parts and processes in order to offer a lower-priced product.

“If U.S. companies start looking more closely at second-level branding versus their historic retreat response, we could start seeing engineering positions start to open,” he says. “The fact is, there is now a large end-user market willing to sacrifice quality for price. This opens up a new area for U.S. manufacturers to compete with lower-priced Asian goods.”

Adamkavicius is not certain if a near-term economic turnaround will bring about a plethora of engineering positions, but he does believe the expected market upswing over the next 18 months will lead many currently vacant engineering positions to be filled again. For now, he suggests engineers seek employment with large global manufacturers, because those companies have a growing need for engineers—especially engineers who are bilingual and can therefore more easily work with counterparts in Asia, South America, and Eastern Europe.

“Those countries just don’t have the engineering talent we have,” Adamkavicius says. “Having a knowledgeable engineering staff that can look at a problem and address it without reinventing the wheel is, and will continue to be, in high demand.”

david.greenfield@reedbusiness.com





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