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How Should Engineers Respond to Tepid US Manufacturing Report?

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Rob Spiegel
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A very wide U
Rob Spiegel   10/5/2011 11:05:57 AM
We've all heard it a zillion times now: recovering from a recession caused by a financial crisis takes longer than recovering from a "normal" recession. For most of us, recessions have been V-shaped. We go down quick. After a couple nasty quarters, we're headed back up. Wow, sure are things different now. The current recession began in the fourth quarter of 2007. And while the recession was officially over by mid-2009, this recovery sure feels like a recession.

I'm not an economist either, but Alex talks about seeing an increase in innovation. Many say that's the sign to look for. The pick-up in innovation is dawn's first light in a substantial recovery. If that's so, bye-bye double dip.

Beth Stackpole
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Re: A very wide U
Beth Stackpole   10/5/2011 12:47:22 PM
I agree with your take, Rob, and with Alex's inclination to not go down the path of panic and doom and gloom. While I can't say I'm exactly optimistic, it seems like if you look at the numbers around manufacturing and company's financials, the picture isn't all that bad, especially in the context of Rob's points about a U-shaped, slower recovery being more the norm after a recession caused by financial crisis. Maybe along with putting our nose to the grindstone and focusing on work, we should all try to see the positive. Half the battle with this on-going economic dulldrums is perception.

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JimT@Future-Product-Innovations   10/5/2011 1:04:22 PM

Alex, I like your Point/Counter-Point argument, and find myself nodding quietly in agreement with both extremes.  Because things are so turbulent, nothing is going work - - - at least at the moment.


To the Counter-Point; we are in a saw-tooth economic market; up 300 points one day and down 250 the next. Who can blame any company for not investing in equipment or expanding staff if they think their stock could face a potential slashing on any given day-?  Wall Street investors are as unstable as a school of herring, darting "to-n-fro" on only the slightest information.


But to the Point, innovations are quietly budding in the labs, in the factories, and even wading into some cautious markets.  (All good comes around, eventually).  But the general investment population has been so beaten-down that even golden-hot-cakes would be met with only a tepid response today.


If we could just turn down the turbulence, the knee-jerk recoils would also settle down.

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Out of Balance
williamlweaver   10/5/2011 1:26:00 PM
As a former defense contractor now teaching the innovation process in academia, I ascribe to the Wharton School's description of the Five (5) components of society, namely, Wealth, Truth, Membership, Values and Power. As with any spinning system, things run "smoothly" when the components are in balance. Affect that balance and things whirl out of control quickly, exibiting higher-order modes of oscillation.

My current view from the ivory tower is that the Power dimension is at odds with the other four. The Wealth component has much innovation to leverage thanks to the Research & Development (Truth & Membership) components, however due to uncertianty in short and long term costs of human and financial capital, regulations, and liability the sideline is currently the safest place to be until "the ride" smooths out.

Regardless of political idealogy, it looks like things will stay status quo at least until the 2012 elections when the uncertianty in the Power component has a chance to subside. 

Charles Murray
User Rank
Keep your heads down
Charles Murray   10/5/2011 2:02:34 PM
Predicting a nation's economic performance is nearly impossible, but I'd say there's good reason for engineers to keep their heads down and hope something good is coming. I agree with Bloomberg's take: If orders for capital equipment are up, that bodes well. Fat City? No. But there's reason for some optimism.

sensor pro
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Re: Keep your heads down
sensor pro   10/5/2011 3:10:42 PM
I agree with you. We should wait and see. Hopefully things will change.

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US Manufacturing
mpr95   10/5/2011 3:34:04 PM
There is a bit of a viscous cycle going on behind the manufacturing report. The main reason manufacturing is tepid is because unemployment is high. Unemployment is high because manufacturers, among others, are hesitant to hire. I'm not a fan of big government spending, but to break this cycle federal jobs programs may be necessary.

Alexander Wolfe
User Rank
Re: US Manufacturing
Alexander Wolfe   10/5/2011 4:52:38 PM
I would agree to the extent that ideology(ies) have made it impossible to have an honest discussion of the dynamic in play, and therefore of a solution. This is perhaps another way of saying it'd be nice if the preponderance of people in Congress were engineers, rather than lawyers.

Rob Spiegel
User Rank
Re: US Manufacturing
Rob Spiegel   10/5/2011 8:53:51 PM
Good point that those in Congress should be engineers. Lawyers thrive on conflict. As for hiring, when companies cannot meet demand without hiring, they'll hire. If they can meet demand without hiring, they won't hire.

Usually, once a recovery begins, companies bring on part-time and temporary workers just in case the upward tick in demand does not sustain. That's where we seem to be now. And it seems like we've been there for about two and a half years.

The upward tick in the electronics industry softened over the summer. U.S. demand for electronics went flat in August. Inventories are at a two-year high (US Gov.). So hiring may be a bit sluggish in the electronic industry.

TJ McDermott
User Rank
Re: A very wide U
TJ McDermott   10/5/2011 9:38:48 PM
It may take a government effort to get jobs moving.  Why not fund a real project, say to DESIGN and BUILD the prototype next generation nuclear reactor, with the caveat that the company also consider it a CCC-style jobs project?



Pick one that is "for the common good", and build it.  Not "unemployed retraining".  MAKE something.

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