The capital goods industry refers to companies that produce physical assets (like machinery, computers, or buildings) that other companies use to produce other goods. Capital goods are not consumer goods (like toothpaste, bicycles, or cellular phones). However, certain items, like vehicles, might be defined as capital goods if purchased by a business but consumer goods if purchased by a consumer.
What is capital goods?
Capital goods are goods that are purchased in order to make other goods. For example, glass used to make windshields for cars would be a capital good. You can think of capital goods as business to business (B2B) goods whereas consumer goods are business to consumer (B2C).
Why Is capital goods an appealing industry?
Why might the capital goods industry appeal to some job seekers? Here are three key reasons:
- The industry includes many well-known companies that have been around for decades—like General Electric, Caterpillar, and John Deere—and are considered stable.
- There are many entry-level jobs in the industry, so it’s a great place to start a career and receive on-the-job training.
- The industry has been growing and is expected to add more jobs in the coming years, as we’ll explore in some detail in the next section.
Is capital goods a growing industry?
According to the Federal Reserve Economic Data (FRED) database, manufacturers' new orders for capital goods have been increasing steadily since April 2020. New orders for June 2022 (the most recent month with available data) were about $74 billion, the highest level of all time.
Do You Need a Bachelor’s Degree To Work in Capital Goods?
This depends on the type of work you would like to do. Many roles in capital goods — like forklift driver or machine operator — do not require any degree and may not even require prior work experience. Others, like engineering, require a minimum of a bachelor’s degree and may also require related work experience.
One of the benefits of working in capital goods is that there are career paths within many companies that enable employees to build their skills and knowledge over time and move on to more complex and lucrative work (even if they do not have a degree).
How many job openings are there in capital goods?
The exact number of jobs available in capital goods varies depending on the source you reference. Based on multiple sources, it's estimated that there are between 970,000 and 1.3 million job openings in the capital goods industry.
Bureau of Labor Statistics on the capital goods industry
The Bureau of Labor Statistics publishes data on employment numbers and projected job openings that lists roughly 1,000 occupations. Which occupations should count toward a capital goods total is somewhat subjective, but there are about 80 that overlap with the industry. In those occupations, there are estimated to be an annual average of 7.3 million job openings for the decade 2020-2030.
According to Federal Reserve Economic Data (FRED), an online database that tracks a variety of economic data, in June 2022 the total dollar value of manufacturers' new orders of nondefense capital goods (excluding aircraft) was about $74 billion. For that same time period, the total dollar value of manufacturers' new orders for all manufacturing was about $555 billion. Using these numbers, we can calculate that capital goods makes up roughly 13% of all manufacturing.
If we assume the number of capital goods jobs is parallel to its percentage of all manufacturing orders, that would estimate about 973,823 job openings annually.
Economist estimates
When contacted about the number of open jobs in capital goods, several economists from the Bureau of Labor Statistics pointed to the Job Openings and Labor Turnover Survey (JOLTS).
Table 7 from the JOLTS report provides “job openings levels and rates by industry.” Nineteen industries are included, ranging from mining and logging to state and local education. The two industry categories that are closest to capital goods are manufacturing and wholesale trade. The sum of job openings for those two industries (combined) in June 2022 was 1,079,000.
Many articles on the internet state there are 1.3 million jobs in capital goods. Based on the sources above, it seems like that number is roughly accurate but might be on the high side depending on how you define the industry.
For our purposes, it’s sufficient to estimate that there are about 1 million jobs in capital goods, which means there’s an incredible amount of opportunity for job seekers.
What types of jobs are available in capital goods?
Capital goods companies hire for a wide variety of roles, ranging from manual labor (like metal fabrication) to knowledge work (like design). Since the goods being produced are physical products, there are numerous manufacturing roles in the industry. However, there are also roles in fields like sales, marketing, and engineering. Here are descriptions for three common roles in the industry:
Computer-Aided Design Technician (or Drafter)
Every product that is manufactured must first be designed. The design process can include engineers, scientists, and various types of designers. Computer-aided design/drafting (often referred to as CAD) enables designers to create and manipulate conceptual designs for analysis, review, and testing before actually sending them out for production.
A computer-aided design technician uses a software like AutoCAD to create designs. Community colleges and trade schools offer CAD training programs that range from 6 to 24 months and are sometimes integrated into longer programs. According to the Bureau of Labor Statistics, the median annual wage for drafters is just over $60,000.
Quality Control Inspector
Quality control inspectors are responsible for ensuring that products are free from defects. They typically work in manufacturing and receive training on quality specifications and protocols.
Quality control inspector can be an entry-level role that provides on-the-job training. According to the Bureau of Labor Statistics, the median annual wage for quality control inspectors is about $39,000.
Mechanical Engineer
Mechanical engineers assist with the design, development, and testing of mechanical devices and products. They apply their knowledge of mathematics and physics to ensure that products are designed to be safe, functional, and efficient. A bachelor’s degree (or higher) is typically required for this type of work.
Mechanical engineering is considered highly-skilled work, and mechanical engineers are sought after by a variety of companies. According to the Bureau of Labor Statistics, the median annual wage for mechanical engineers is about $95,000.
Final Thoughts
The capital goods industry represents a significant opportunity for job seekers looking for entry-level roles, on-the-job training, career development, and job security. Current trends suggest that the industry will continue to grow over the coming decade.
If you’re already in a career path you enjoy, you can start looking for your desired job titles on the job boards of capital goods companies of interest. If you’re looking for some direction on where to take your career next, read “What Job Is Right For Me?” and “An Introduction to Teal Work Styles” to gain some clarity on how you work best and get a sense of the roles that might be a good fit.
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