Industry Trends

Spending Levels and Baby Boomers
The greatest factor influencing the growth in this sector is the steady growth of disposable income. Every year for the last five years, disposable personal income increased five percent. When people have more money, they spend more on themselves and their interests. During the same period, personal consumer spending for sporting goods increased six percent. This growth is expected to continue at least over the next 5-10 years, and probably longer.

As impressive as this steady growth is, the 70s, 80s, and even 90s showed tremendous jumps in spending levels for sporting goods. What was driving force behind the robust spending of those decades? Baby boomers - that large demographic of people born between 1945 and 1965. Any discussion of consumer spending and habits will touch upon this economic force, and the economics and productivity of sporting goods is no exception.

Through the 90s and up to the present day, the baby boomers as a group have turned their attention to lower-impact activities. So, while they are still spending, the types of apparel and accessories they are buying has changed.

Expanding Global Consumer Marketplace
China and India are both fast becoming full-fledged consumer societies. Disposable income in both of these developing economies is rising quickly and many of the sporting industry giants are making a significant investment in time and resources to capture the attention of these new consumers. Demand will rise for the current product lines, but new products will be needed as well. To meet the demands of these markets, companies will need to expand the scope and reach of their resources and facilities. Engineers will be a vital part of this expansion.

The increase of imports is another industry trend. As a general rule, goods manufactured in countries like China, Pakistan, and Indonesia (all major sporting-goods-producing countries) cost less, since labor costs in those countries are significantly lower than labor in the United States. Since labor is a significant cost in the production process for sports equipment, many manufacturers are choosing to import products so prices are more attractive to retailers and consumers. Like so many trends at play in sporting goods, this is true across the consumer goods industry.

Outsourcing manufacturing does not necessarily mean bad news for domestic engineering jobs in the sporting goods sector. While manufacturing jobs in the U.S. may decrease, the engineering and design portion of the production process, as well as management and marketing functions, are still handled domestically and will be for the foreseeable future. Price is not the only advantage in marketing sporting goods and equipment. Innovation and performance are major selling points and major sports manufacturers are going to need engineering teams to keep producing that valuable competitive edge.

Environmental Consciousness
The environment has been an increasingly important social issue and these days it has also become an important business issue across many industries, not the least of which is the sporting goods and equipment sector. The "Green Revolution" in the sporting goods industry is being led by companies that have started recycling programs, implemented greener manufacturing processes and drawn up environmental impact plans for everything from plant development to waste management and the transportation of goods and materials.

Nike, for example, is a leading proponent of greater sustainability. For the past 15 years, Nike's ‘Re-Use A Shoe’ program has been a shining example of how big an impact a little innovative engineering can make by significantly decreasing the waste levels in landfills and making things a little brighter for communities around the world. The program takes the millions of pairs of athletic shoes (of any brand – not just Nike) discarded every year and recycles the materials for use in basketball and tennis courts, track and field facilities, and the playgrounds that are part of Nike's community investment programs.

Sustainability will continue to be a critical social and business issue for the foreseeable future. Any company that wants to address the issue seriously and succeed as a good social citizen will be calling upon engineers to find ways to accomplish that goal.