Manufacturing waxes, executive jobs wane

InTech, Jul 2004 by Fussell, Ellen

Industries reporting growth in May include petroleum; industrial and commercial equipment and computers; apparel; paper; instruments and photographic equipment; chemicals; fabricated metals; furniture; and glass, stone, and aggregate.

Economic activity in the manufacturing sector grew in May-for the 12th month-while the overall economy grew for the 31st month, according to a June Institute for Supply Management (ISM) report on business. The Manufacturing ISM Report on Business compiled data from monthly replies to questions asked of purchasing and supply executives in more than 400 industrial companies. The ISM is an educator of supply management professionals and a resource for decision makers in major markets. Although these industry watchdogs said they do see strong demand for jobs, they also expressed major concerns about rising materials prices-especially the cost of energy.

The purchasing manager's index (PMI) said the manufacturing economy grew in May for the 12th consecutive month-registering at 62.8%-an increase of 0.4 of a percentage point compared to April's 62.4%. The overall economy and the manufacturing sector are growing, said the May PMI. The past relationship between the PMI and the overall economy indicates the average PMI for January through May (62.5%) corresponds to a 7.2% increase in real gross domestic product.

ISM's employment index grew for the seventh consecutive month, following a 37-month waning trend. The index registered 61.9% in May compared to 57.8% in April, an increase of 4.1 percentage points. Industries reporting growth in May include petroleum; industrial and commercial equipment and computers; apparel; paper; instruments and photographic equipment; chemicals; fabricated metals; furniture; glass, stone, and aggregate; wood and wood products; rubber and plastic products; electronic components and equipment; transportation and equipment; primary metals; food; and textiles, the report said.

Demand wanes for manufacturing execs

Yet, while the manufacturing sector is growing, another study of a global database of senior executives said searches for manufacturing executives are declining. These job searchers would benefit from repackaging themselves to conform to the positions recruiters are trying to fill. The analysis came from BlueSteps, an online career management service for senior executives seeking to gain the attention of members of the Association for Executive Search Consultants (AESC).

Searches for executive resumes in manufacturing declined 45% from May 2003 to May 2004, according to executive recruiters' analysis of search activity.

In May 2003, AESC members conducted 492 resume searches in BlueSteps. About 55% of the searches pursued resumes for the manufacturing industries. In May 2004, AESC members conducted 606 searches; 30% were for resumes in the manufacturing industries. Manufacturing includes aerospace, automotive, chemicals, computers, appliances and electronics, industrial equipment and machinery, packaged consumer goods, mining, paper, petroleum, pharmaceuticals, and textiles.

The fall in manufacturing demand follows in the footsteps of the industry as a whole in the U.S., said Peter Felix, president of AESC. Yet quite a few manufacturing executives have skills that aren't necessarily specific to their industry, such as systems integration. Executives in the declining industries "need to retool their resumes to be considered by search consultants for positions in other industries,"he said.

An analysis

What does this mean for executive job seekers in the manufacturing arena? Does the first statistic jibe with the second? "Yes, if they are both true," said Dennis Brandi, president of BR&L Consulting, Inc. in Cary, N.C. If so, then what they mean is "there is increasing manufacturing demand, handled by increased manufacturing efficiency [2-3% per year compounded] but in a smaller number of companies," he said. "This is a result of continual manufacturing consolidation [so that the industry needs fewer senior executives] in manufacturing companies, such as pharmaceutical companies buying smaller companies, chemical companies buying smaller companies, and the like."

Brandl said companies are working to get bigger to meet the demand. "The growth in manufacturing employment is flat or even down," he said, "but each site is getting more productive [making more with fewer personnel resources]. Also manufacturing executives could be staying in manufacturing, so there is less need to go outside the company."

Why? There are fewer but bigger manufacturing companies, Brandi said. "The big companies will focus on productivity increases such as six-sigma programs," he said.

It also means fewer upper-level management positions, as companies flatten their organizations to gain efficiency. "Anyone in manufacturing will have to have several skills, including productivity improvement skills, since total employment will stay flat or even decrease," he said. "This will also involve more lateral transfers as personnel gain experience in multiple parts of the manufacturing enterprise."