Posted on 06/16/2002 7:16:25 PM PDT by DeaconBenjamin
The European engineering sector is likely to shed 150,000 jobs this year as a result of a continuing slowdown in demand, and as companies shift manufacturing to lower-cost countries, according to industry projections.
The forecasts by Orgalime, a Brussels-based body that represents 100,000 engineering companies in 21 countries, underlines fears that the weak world economy will cause problems for business for some time.
According to Adrian Harris, Orgalime's director- general, the industry has been particularly affected by the "brutal slowdown" in telecommunications, which is having a big knock-on effect among companies producing mobile phones and switching equipment.
Engineering employs 7.6m people across Europe, with total sales adding up to more than E1,000bn ($945bn) a year. The sector is one of the best bellwethers of the overall performance of industry.
Orgalime's economists believe output by the sector will decline 1 per cent this year, after a 0.5 per cent fall last year. There will be a small bounce back next year.
While many European engineering companies have been hit by the slowdown in the US, a big export destination, the competitive pressures has led many to redouble efforts to shift production out of high-cost countries in the western part of the continent.
Mr Harris said beneficiaries of this trend, in terms of employment, were countries such as Poland, the Czech Republic and Hungary.
Also there was evidence that the shifts eastwards were becoming more pronounced. "We are starting to pick up anecdotes of companies based, for instance, in Slovenia moving production to Romania because costs are lower," Mr Harris said.
Countries in North Africa also appear to be increasing engineering employment, as a result of relocations. For instance, companies in Spain were finding they could set up plants that were more competitive in countries such as Morocco, Mr Harris said.
The trend towards companies moving their plants out of the "core" European countries shows up in Orgalime's forecasts for investment by the industry in plant and buildings.
Spending by the engineering industry on these areas is set to decline 1.5 per cent this year, after a 2.7 per cent fall in 2001.
Finland this year appears to be leading the way in terms of an investment drop, with a projected decline of 11 per cent. Some of this is linked to a downturn in the mobile telecoms sector and the problems facing Nokia, the large Finnish mobile phone company. France is forecast this year to see an investment decline of 5 per cent.
Falls in investment are also likely in 2002 in Germany, Sweden and Britain while Austria, Italy and Belgium are considered likely to buck the trend and show an upturn in spending.
The cost of living in Pocatello is such that a $70K annual income is as good or better than a $108K income in San Diego, CA. Lots of houses with 2000 to 5000 sq ft for very reasonable prices as a consequence of local businesses shutting down.
Many entrepreneurial start-ups are scrambling to move
overseas to lower-tax and lower-regulation (lower-BS) jurisdictions.
(It ain't just Stanley Tools, folks...)
I have reason to know. It's simply a matter of survival
in the current political-economic context.
The current wave of competition may force American companies into a diaspora away from the expensive cities and urban/suburban areas. American companies changed to fight the Japanese economic threat of the 70s, 80s, and 90s. That led to quality initiatives throughout the country. Many companies died. Many more were born. All of the survivors are stronger. Perhaps the new challenge will strengthen America too by spreading technology and jobs into the rural regions.
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Look at the figures. The answer is no. An area such as Pocatello would be personally preferable than other places in the U. S. But I still can't complete with a good engineer making $1,200 a year, or even $1,2,00 a month. What's being done is to ship the work out, pockets the increased profits and put me out of the loop.
I was involved with HDD a few years back & traveled on occasion to Malaysia. That country was heavily depending upon that industry economically...
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