How is the looming recession affecting the automation industry?
Unfortunately, my column this week is filled with more questions than answers. I have to preface this conversation with the disclaimer that I’m not an economist and economics wasn’t one of my strongest courses in college. So I have to ask the question; Why are we suddenly in a recession? What was the tipping point? The housing market has been drastically down for more than three years. Consumer spending was down over the holidays. The unemployment rates have not been horribly high, although now there is talk of companies planning layoffs. The Federal Reserve just lowered the interest rate by a whopping ¾ of a point – and they are talking about going lower. Bush has proposed an economic stimulus plan. What just happened?
As near as I can tell, there are two things occurring. One - it’s an election year in the U.S. Two - the media is now talking about a recession. Now that the media says we are in a recession, everyone seems to be acting like it. Besides, it’s a great topic for all those presidential candidates. I wonder if it’s a self-fulfilling prophecy. A few weeks ago, all the media could talk about is Britney Spears. I couldn’t stand it. Now, I’d rather have them talking about the Britney Spears– just so they aren’t a catalyst to a downward economic spiral.
But, seriously, what’s really happening? More importantly, how is the looming recession affecting the automation industry? I’d like to hear from you.
For all you end users out there…Is your company laying people off? Has the demand for your company’s manufactured products suddenly decreased? Are you putting automation projects on hold?
For all you suppliers and resellers out there…Are you seeing a decrease in the purchase of automation products?
For all you systems integrators out there…Is it hard to find projects?
I’ve created a forum on MyAutomation.com. Please share your perspective. I, along with the rest of the automation industry, would appreciate your personal take on the recession. If you are currently not a member of MyAutomation.com, please take a minute to Register, so you can participate in this and any other upcoming discussions.
Last year, many automation suppliers experienced significant growth, ex. ABB, Schneider Electric and others. ARC Advisory Group is forecasting continued growth in 2008, although maybe not as high. Is that still true? You'll also notice that the first two company and organizational news stories are predicting significant growth of automation product sales.
We all know there is a huge deficit of automation talent in the U.S. market, so I can’t imagine it’s difficult to find a job. We are always seeing new job postings on the site, so I know companies are hiring. Our automationtechies recruiting group is busier than ever, trying to fill automation positions.
However, on the web site side of the business, we are starting to see budget cuts in advertising - just in the last two weeks. As soon as the media started talking about recession, we started hearing about marketing budget cuts. Not from everyone, but from smaller, more sensitive companies. My question is this - Are companies really seeing other signs and symptoms of recession, or are they just taking a “wait and see” approach? Remember my article last week, Open is as open does. If everyone acts like we are in a recession, we will be.
Someone, anyone, please enlighten me. Share your thoughts in our forum. Maybe with your feedback, we can shed some light on our questionable economy.
Enjoy the rest of this Automation Weekly!
Vice President, Publisher