Capital Goods Industry Primer: How Many Jobs are Available?
Of the major industrial sectors in the United States, capital goods are best positioned to create new jobs in coming years. In fact, with an aging infrastructure and the growing use of computing devices and other information technology, demand for capital goods will continue to rise even as demand for consumer goods and services tapers off. But how many jobs are available?
Types of capital goods
Capital goods, in a nutshell, are investments. They’re physical assets that help to create other products or services. Machinery and equipment (machines) fall into capital goods, as do software and research and development (R&D). To be considered capital goods by economists, these items must have an expected lifespan of at least three years—or they must be meant to last at least three years—and they must involve some form of investment. In addition to machinery, capital goods can include containers like ships or trucks; technology like software; manufacturing facilities and equipment; mobile homes; railroad cars and locomotives; energy sources such as drilling platforms and oil wells; electrical grids; telecommunications systems such as satellites and computers for network servers. The list goes on…
US Trends in Cap Goods Employment
From 1955 to 2003, total employment in manufacturing declined from 27.1 million to 19.7 million workers, a decrease of 38 percent. In capital goods (i.e., durable manufacturing), there was a net loss of 1.4 million jobs—from 2.2 million to 1.8 million workers—between 1993 and 2003 (the last year for which data is available). There were 5.5 million capital goods production workers in the US economy in 1995; by 2002 this number had dropped to 4.9 million with declines concentrated primarily among production employees. The decline in capital goods production employment has been most pronounced in the machinery and computer industries, which experienced a 36% decline between 1993 and 2003. The automotive industry lost almost one-third of its workforce over that same period.
Canada Job Growth by Sector
Capital goods manufacturing jobs have grown by 9% since December 2016. The manufacturing sector saw growth in 2015, with a 6.7% increase in employment levels. This growth was driven by transportation equipment and parts manufacturers, which had a year-over-year increase of 17%. However, despite some promising data on job numbers and manufacturing activity, capital goods industry employment still remains below pre-recession levels.
The Global Market for Cap Goods
$1 Trillion Market for cap goods, huge demand for skilled labor, impact of advances in technology. When you think of capital goods, do you think of tractors and steel mills? If so, then you’re not alone. But as it turns out, capital goods also include some pretty interesting stuff that is more common than people realize. The number one type of capital good is computers—specifically servers and semiconductors used to produce servers. In fact, the global market for capital goods (which includes computers) is projected to grow from $1 trillion today to a whopping $2 trillion by 2020. That’s why we need qualified workers with the skills needed for today’s advanced manufacturing jobs.
Cap Goods R&D Spending
The capital goods industry has a long history of investing in research and development. Here’s a quick primer on some recent spending figures and what it means for your career. The total amount spent by the Capital Goods R&D sector from 2009-2013 was $1,129 billion.
The Capital Goods sector’s share of R&D investments in 2013 was 5%.
In 2013, the Capital Goods sector accounted for 7% of all jobs (full-time equivalents) in private industries engaged in manufacturing or construction.
Capital Good Export Data
To determine how many jobs are actually available within these industries, we need to start with some numbers. How many capital goods (machinery and equipment) is each U.S. industry producing, and how much do they export? The table below shows the production value of capital goods by industry in 2012, as well as the percentage of exports in the same year.
The top three industries that produce the most capital goods include transportation (34%), industrial machinery (24%), and electrical machinery (20%). These three industries together account for 75% of all U.S. production of capital goods and 74% of exports of capital goods in 2012.
What are the Benefits of Investing in Capital Goods?
Capital goods have no resale value after their life is done, so some investors shy away from them. They say, How can I make money off of capital goods when they’re not worth anything once I’m done with them? This is where patience and a long-term outlook come into play. Capital goods take a while to create; it might take years for the payoff.
For example, how many jobs are available in capital goods? There were more than 500,000 people employed in the industry as of 2016.
Why it Pays to Join U.S. Department of Commerce Exports Success Insights Series
The US Department of Commerce (DOC) has created a new online community called Exports Success Insights Series (ESIS) to help businesses across all industries, large and small, increase their exports. They have invited over 40 leaders from industry associations, private companies and government agencies to share best practices with ESIS members. After joining ESIS as a member, you will be able to join these communities and get advice from some of your most trusted experts in business development. If you’re trying to grow your capital goods business overseas, ESIS can help connect you with experts who know how to make it happen. Plus, you can network with other exporters for support, share best practices and learn about available resources. Join today!