Companies that manufacture products used to produce other commodities or services make up the capital goods sector. For instance, a company that produces tools used in the assembly of vehicles would be categorized as a capital goods company. The industry comprises a wide range of businesses of all sizes, many of which are in the manufacturing industry.
What are Capital Goods?
Physical items not directly acquired by consumers are known as capital goods. This broad description covers a huge variety of things, from a $5 hammer to a $50 million building. A product is not considered a capital good if a customer buys it. A business acquires a capital good to create other commodities and services. An example of a consumer good is a car someone buys for their usage. However, a business that buys an automobile for delivery purposes is a capital good.
Capital goods fall into the following categories: buildings, machinery, tools, and automobiles.
Industry Outlook for Capital Goods
Over the past two decades, businesses in the U.S. have produced capital goods at a monthly rate of between $50 and $70 billion. (Aircraft and related capital products are excluded from this.)
Federal Reserve Economic Data (FRED) data on manufacturers’ new orders for capital goods show that numbers have been rising steadily since April 2020, which suggests that demand for capital goods is increasing when some other industries are experiencing difficulty due to inflation and other macroeconomic factors. The number of new orders in June 2022 (the most recent month for which data are available) was roughly $74 billion, a record-breaking amount.
According to current trends, the capital goods sector may continue to expand despite a number of difficulties associated with the ongoing pandemic and an increase in demand for remote work. Even though not all manufacturing employment comes within the capital goods category, there is a large amount of overlap between the two. Deloitte’s “2022 Manufacturing Industry Outlook” offers an approximation for useful analysis in this area because the Bureau of Labor Statistics doesn’t categorize capital goods: “As industrial production and capacity utilization exceeded pre-pandemic levels midyear, strong increases in new orders for all major sub-sectors signal growth continuing in 2022.”
Of course, no one has a crystal ball, but based on its current trajectory, the capital goods business appears stable and expanding.
A large industry that affects almost all economic sectors is capital goods. It contains businesses of all sizes that employ individuals in tens of thousands of various job titles. This indicates a significant chance you could locate a career path appropriate for you within the capital goods sector.
Twelve positions that are typical in capital goods companies are listed below:
- Marketing Manager
- Industrial Designer
- Electrical Engineer
- Computer-Aided Design Technician
- Forklift Operator
- Sales Manager
- Occupational Safety and Health Specialist
- Machine Operator
- Management Analyst
- Mechanical Engineer
- Quality Control Inspector
Benefits of Working in the Capital Goods
The advantages and disadvantages mostly depend on the business you work for because there are so many different companies in the capital goods sector. Here are a few explanations why you might love working for a company that makes capital goods.
Stability – Many capital goods companies have been in operation for a considerable time, and their operations are largely stable.
Starting your career – Capital goods offers a variety of entry-level positions, many of which do not require a four-year degree, allowing individuals to get experience in the field while earning a living.
Perks and promotions – Many capital goods businesses, particularly the bigger ones, offer fantastic benefits and many opportunities for advancement.
Safety – Compared to many other businesses, the capital goods sector has a higher risk level since employment includes manufacturing and other manual labour.
Bureaucracy – Capital goods contain several larger, more established businesses and manufacturing firms that are frequently hesitant to transform and keep up with contemporary trends. They might not have the most advanced techniques or regulations.
Impact – Although capital goods are essential for a functioning economy, working in the sector means you’re probably less likely to be involved in finding solutions to the social and environmental issues that our planet is currently facing.
Consider looking into a profession in capital goods if you’re seeking employment security and income possibilities in these challenging and uncertain times. Depending on your interests and skill set, numerous entry points into the business are rapidly expanding.
If you’re already on a career path you like, you can start searching for the job titles you want on the job boards of potential capital goods businesses.