December seems like a month in which most people look backward (year in review, etc) but it is also a great time to look forward, especially when it comes to business. You have a nice tidy data set of the previous year and it can be easier to spot trends. Most of my followers are in the chemical manufacturing industry (or something closely related) so I thought I would tell you what I'm seeing from my perspective in terms of the engineering job market going forward over the next year.

Without a doubt, the number of openings has been on the decline now for a few months. Not only have I seen this from my own desk but many industry news items allude to it as well...in particular, news from BASF, SABIC and Huntsman (among others). There are several factors that have contributed to this slow-down including, but not limited to: weaker foreign markets in Brazil and China, a very weak oil & gas market, and a changing corporate landscape among larger chemical manufacturers.

Cheaper fuel and transportation costs for the commodity and industrial chemical sectors can definitely be a good thing and has been a good thing for many companies. But on the flip-side, the Oil & Gas industry is a huge demand driver and many chemical manufacturers provide raw materials or chemicals to the oil & gas industry. Without that economic driver, a weakened oil & gas industry has had negative economics effects on at least some part of the chemical process industry. Geographically speaking - the oil & gas market collapse and subsequent exodus of talent has affected the Gulf Coast job market in a different way. There are no openings because the market for talent is so flooded...companies seemingly have no problem finding people on their own so they don't need people like me, and usually they don't even need to advertise openings because everyone down there knows a handful of people who are actively looking for work.

Another indicator is the number of large acquisitions that have been recently reported. In just the past few months, here are some of the big ones that have been announced:

- Air Liquide bought Airgas ($13.4B) - link

- Cytec bought Solvay ($6.4B) - link

- Dow bought the Chemours Aniline Unit ($140MM) - link

- Huntsman bought Ampac's Specialty Chems Business (~$200MM) - link

- Kraton bought Arizona Chemical ($1.37B) - link

- Symrise acquired Pinova Holdings ($397MM)

- Very recent rumors of a merger between chemical giants DuPont and Dow Chemical ($130B+ total value between the two companies) - link Update (4:15pm CT): Now official as of this morning. Dow also announced that they are going to buy out the Corning part of the Dow Corning joint-venture. Essentially, they are paying Corning Corp $4.8B for their part of the venture. Corning will now be aligned with Hemlock Semiconductor.

hen there is belt-tightening going on we see more acquisitions and this level of activity is just another indicator that we're going through some leaner times. The number of mass layoffs we're seeing is on the rise too. Early in the year it upstream oil & gas companies laying people off in droves, now it is companies like DuPont, Air Products, INVISTA and Texas Petrochemical. In my small world, we have seen a decline in the number of openings by about 20% this year as compared to 2014. Another sign that I see that hints at a downturn is an extreme scarcity of R&D roles. When profit margins are tight, R&D is usually the first thing to get cut and seeing virtually no open R&D positions is a strong indicator that the overall market is not as healthy as it could be.

You're saying to yourself, "OK, I get it, things don't look great - so what's the outlook?" I think until oil industry recovers a little bit, we will continue to see a comparatively bland job market for engineers. With that being said, there are still a good number of jobs open at any given time because of the fact that far more engineers are retiring than are graduating from our colleges and universities. Things are no where near as dire as they were in 2008 and 2009 and I don't see that kind of drop-off in demand on the horizon. For every doom and gloom piece you see like this, you also see articles like this that show some of the resiliency of the chemical process industry. Companies in the food ingredients, pharmaceutical and food/pharma additives businesses are doing quite well in this market and we have seen a big push for hiring in those sectors.

As for engineers, your job security outlook remains positive, especially if you have between 5 and 20 years of experience. Because of the imbalance between the number of people retiring vs. the number of new graduates, there continues to be a huge demand for that engineer who is "in between". More and more, companies are looking to hire people who can "hit the ground running" and who have some experience under their belt. For those of you with process or project engineering backgrounds and 5+ years of experience, you can virtually name your location and expect a very competitive offer (or offers).

In summary, the engineering job market now is not as hot as it has been in recent years, but it is also not completely cold...let's call it lukewarm. There are less jobs open, but there are still openings and the number of openings really depends on the specific industry niche that you are talking about, and the location. Upstream oil & gas? Not so many jobs. Specialty Chemicals and food/pharma additives? More jobs. Gulf Coast areas? Not so many jobs. Midwest and Southeast? Lots of jobs. I don't see this current climate changing anytime soon as most 'experts' are forecasting the oil & gas industry to remain down until 2017 (or beyond). 2016 looks like a year in which the chemical process industry will be treading water.