bennybox

My attempt at a macroeconomic analysis of my search for full-time employment as a mechanical engineer. Includes notes from Larry Smith ECON102, Introduction to Macroeconomics.

In January, 26,000 jobs were created in Canada (24,000 in February). 16,000 jobs net were created in Ontario, even though 33,000 manufacturing jobs were lost. This suggests that the manufacturing industry is contracting in Ontario, likely due partially to automotive industries growing in China as quality of their automotive sector is almost inline with North American levels. About 50% of mechanical engineers work in manufacturing. In February, Ontario lost 17,000 jobs but net up 88,000 year over year.

The total number of mechs in manufacturing is expected to drop, in part due to industries moving outside North America, but also in part due to improvements in manufacturing technologies. There will be demand for engineers who can design, test and maintain these new complex tools and systems (like mechatronics). Fast growing sectors like nanotech, materials science and biotech provide opportunities for mechanical engineers.

Year over year employment has increased in Canada by 275,000 (+1.7%), almost half of which has been in British Columbia and Alberta. In the US, growth is up (242,000 net Seasonable Adjusted in February) which is okay given the historic rate, and almost proportionally as high as Canada.

There are two kinds of hires: replacing someone who was fired or retired or quit, and new positions being created. Generally, engineers leave their jobs early at a much smaller pace than average, meaning that sectors where jobs are being created is where one should look. It’s unlikely, especially for a new grad, to find a job replacing someone.

GDP growth, the measure of an economy’s productive output are high both in US and Canada. The Bank of Canada and the Federal Reserve believe that their respective economies are operating at or near the productive capacity. Which means that economists expect interest rates to rise. Raising interest rates will slow the economy from growing too fast as it limits our ability to borrow - and company’s ability to invest and create more jobs.

Canada’s economy is strong, and the strongest in the G7 nations. We have a huge trade surplus, which contributes to our high standard of living. Overall inflation dropped in February from 2.8 to 2.2 but most of it was driven by rising energy prices. The target range for inflation set by the Bank of Canada is 1-3%.

Last week, the Federal Reserve increased the interest rate to 4.75 from 4.50. Growth is good, and on par with Canada. Despite journalistic rhetoric, the US economy is strong, and there will likely be one or two more interest increases.

All in all, this means the job outlook is good. The economy isn’t booming (which in the long-term is good), and it probably won’t ever again if the Bank of Canada keeps everything in check. The unemployment rate is dropping, and has matched the November 2005 30-year low. In Ontario particularly, the drop is due to less people looking for work.

Employers are hiring, and for three years in a row the hiring rate is increasing. In the US, analysts predict 14.5% more new hires over the 2005 graduating class while offering higher starting salaries. “Public accounting firms and consulting services firms reported the brightest outlook for new grads; engineering/surveying firms, building materials and construction firms, and financial services companies also predict that they’ll be hiring.” Mechanical engineers for Aerospace manufacturers, Automotive & mechanical equipment manufacturing and Utilities is what employers say they’re looking for.

For bachelor’s degrees, mechanical engineers top the list of grads in demand. If you’ve got an MBA this year, 51.4% of US employers say they’re looking to hire you.

Communication skills top the list of most desired attributes. At least one employer noticed the blogging - hopefully I come off as being able to communicate clearly in the online.

I wonder if the UW career centre keeps track of how many employers come to campus each term for recruiting. In the last two years, I’ve noticed many companies (like Telus, Google and Apple), with a traditionally small presence become a lot more agressive here. More new-hires are found from campus recruiting than other sources (like job fairs and internet postings) which makes sense - they’re looking to hire specifically new grads. In the larger market, about 75% of positions filled aren’t advertised anywhere - usually internally found or referred.

In my class the job outlook doesn’t seem so great. Most of my friends either don’t have jobs, or are too afraid of not finding a job they’ve decided to do further grad studies. Of my personal circle of classmates, I know of just one with a job - out of about 20 or so? In the rest of the class, I know of a specific six others who know where they’re working.

It’s nice that I can have some time to put some of my thoughts down. The job search has been slow and I’ve been much less proactive than I should have been. It’s coming down to the wire. School ends for me is 16ish days. They say it takes a new-grad on average 9 months to find that first job. Nine months at home with nothing to do sounds pretty horrible right now - it’s just going to be tough to get through the four exams I have this week.

Sources: US Department of Labour, Statscan, NACE, ECON102 notes