Capital Goods Careers: Opportunities & Industry Growth

Exploring Job Opportunities in the Capital Goods Industry

The capital goods industry encompasses companies focused on producing tangible assets – think machinery, equipment, and buildings – that are then used by other businesses to manufacture goods or provide services. It's important to distinguish these from consumer goods like everyday household items. While some items, such as vehicles, can be classified as either depending on who purchases them, capital goods are primarily business-to-business (B2B) products.

What Exactly Are Capital Goods?

Capital goods are essentially the tools and equipment required to produce other goods. Consider glass used in car windshields: that's a capital good. The sector operates on a B2B model, contrasting with consumer goods which follow a business-to-consumer (B2C) model.

Why Consider a Career in Capital Goods?

The capital goods sector holds appeal for several reasons:

• Stability: The industry is home to many long-standing, reputable companies, offering a sense of job security.
• Entry-Level Opportunities: A good number of entry-level roles are available, making it a solid starting point for a career with on-the-job training.
• Growth Potential: The industry is experiencing growth and is projected to add more jobs in the coming years.

Is the Capital Goods Sector Expanding?

Data from the Federal Reserve Economic Data (FRED) indicates a consistent rise in manufacturers' new orders for capital goods since April 2020. In June 2022, these orders reached approximately $74 billion, marking an all-time high.

Do You Need a Degree to Enter the Field?

The necessity of a bachelor's degree depends on the specific role. While some positions, like machine operators, may not require a degree or prior experience, others, such as engineering roles, typically require at least a bachelor's degree and relevant experience. A significant advantage of working in capital goods is the potential for career advancement within companies, allowing employees to develop skills and progress to more advanced roles, even without a formal degree.

How Many Jobs Are Currently Available?

The estimated number of job openings in the capital goods sector varies, but multiple sources suggest a range of approximately 970,000 to 1.3 million.

Insights from the Bureau of Labor Statistics

The Bureau of Labor Statistics (BLS) provides data on employment and projected job openings across approximately 1,000 occupations. Around 80 of these occupations align with the capital goods industry. Within these, an average of 7.3 million job openings are projected annually for the decade spanning 2020-2030. According to FRED, manufacturers' new orders of nondefense capital goods totaled around $74 billion in June 2022, compared to $555 billion for all manufacturing. This suggests that capital goods account for about 13% of all manufacturing. If we assume that the number of capital goods jobs mirrors its percentage of manufacturing orders, we can estimate roughly 973,823 annual job openings.

Economist Estimates

Economists at the Bureau of Labor Statistics often refer to the Job Openings and Labor Turnover Survey (JOLTS) when asked about job availability in capital goods. Table 7 of the JOLTS report provides data on job openings by industry. The manufacturing and wholesale trade industries are the closest categories to capital goods. In June 2022, the combined job openings for these two industries totaled 1,079,000.

While some sources cite 1.3 million jobs in capital goods, a more conservative estimate based on the data suggests around 1 million jobs. This still represents a substantial opportunity for job seekers.

What Kinds of Jobs Can You Find?

The capital goods industry offers diverse roles, from manual labor to specialized knowledge work. Given the focus on physical products, manufacturing roles are common. However, opportunities also exist in sales, marketing, and engineering.

Here's a brief overview of three typical roles:

• Computer-Aided Design (CAD) Technician/Drafter: These technicians use software like AutoCAD to create designs for manufactured products. Training programs are often available at community colleges and trade schools. The median annual wage for drafters is around $60,000, according to the BLS.

• Quality Control Inspector: Quality control inspectors ensure products meet quality standards. They typically work in manufacturing settings and receive training on quality specifications. This can be an entry-level position with on-the-job training. The BLS reports a median annual wage of approximately $39,000 for quality control inspectors.

• Mechanical Engineer: Mechanical engineers are involved in the design, development, and testing of mechanical devices and products. They apply principles of mathematics and physics to ensure safety, functionality, and efficiency. A bachelor's degree is generally required. Mechanical engineers are in high demand, and the BLS indicates a median annual wage of about $95,000.

In Conclusion

The capital goods industry presents a significant avenue for job seekers, particularly those seeking entry-level positions, on-the-job training, career advancement, and job stability. Current trends suggest continued growth in the sector in the coming years.

Frequently Asked Questions

What types of roles are most common in the capital goods sector?

The capital goods sector offers a variety of roles, including mechanical and electrical engineers, production managers, quality control inspectors, sales representatives, and supply chain analysts. These positions are crucial for the design, production, and distribution of capital goods, and they require a range of skills from technical expertise to business acumen.

Are there entry-level positions available in the capital goods industry, or is it more suited for experienced professionals?

The capital goods industry has opportunities for both entry-level and experienced professionals. For newcomers, positions such as junior engineers, assistant production managers, and sales associates can serve as gateways into the sector. For seasoned professionals, there are higher-level roles like senior engineers, plant managers, and strategic planners that offer opportunities to leverage their expertise.

How has the demand for jobs in the capital goods sector changed in recent years?

The demand for jobs in the capital goods sector has been influenced by technological advancements, globalization, and economic shifts. While automation has streamlined some processes, it has also created new jobs in tech support, programming, and system analysis. Additionally, as economies grow, there is an increased need for infrastructure and machinery, which can lead to more job openings in the sector.