Key takeaways for design community
by Jeff Reinke, Editorial Director, PD&D
So while the Product Design & Development Stock Index did see growth for the second straight week, the cumulative gains during this stretch have been about six points – not exactly the most stimulating of news. So the real question is, what are the key takeaways for the design community when analyzing this flat economic indicator?
With that in mind, here are my thoughts on things to consider when looking for insight from Wall Street performance:
1. Know when to walk away, know when to run. While Kenny Rogers may not know the first thing about designing airplanes or weapon systems, he was dead on when describing a couple of the market segments we track. The aerospace sector has been on a roller coaster for most of the last six months. This seems to stem from government funding that has been more selective and a number of private sector orders that have either been cancelled or scaled back.
For the industrial and medical sectors, there has been more negative than positive news from Wall Street. The industrial situation is obvious, due to production cuts and the resulting decrease in spending. On the medical side, it seems hospital purchasing of larger equipment was already in place, so those types of product offerings have not felt the impact. However, the mixture of unemployment-related insurance issues, fewer elective procedures being performed and others being more selective about the frequency of their visits to the doctor has led the medical sector to feel an economic pinch. The good news is that as the cyclical nature of the economy turns, so will these sectors.
2. Flat is still better than down. While unemployment levels are high and manufacturing output continues to lag, it seems most of the bleeding has been stopped and many are optimistic that we can stay below that magical 9 percent unemployment benchmark. This helps ensure a consistent spending level.
3. Living on the edges. The trick for everyone is balancing responsible spending on new product development without foolishly overspending. Remember, while Columbus was on the outlook for sailing off the end of the world, it didn’t keep him from trying to improve a current approach.
4. A win is a win. Okay, so the automotive and consumer electronics indexes were both up less than $2 from a week ago, but it’s still incremental improvement and offers guidance on the steady growth both sectors have experienced over the last two months.
5. The right stuff. Regardless of all the leading economic indicators that you want to look at, a capitalist economy still comes down to people needing stuff. Eventually this stuff breaks, wears out or is consumed. Then we normal folks look to you in the design community to make newer, better, faster, brighter, safer, less flammable, easier to use, harder to break, can’t live without it stuff to replace the former … right now, please. Currently, more of this is sitting on warehouse shelves than anyone would like, but eventually these supplies will run it and then we’ll need somebody to design, make, deliver and service the stuff we want and/or need.
Just as Columbus and those who followed him soon realized – while things may appear flat from where you’re standing, moving forward helps one realize that almost everything flow in nice, round circle. Some just take longer to navigate.