Another toy fair, come and gone.  While at the toy building the mood was one of very cautious optimism over at the Javits Center things were much more upbeat.  The consensus among specialty toy manufacturers seemed to be that the smaller specialty stores and toy boutiques that were able to survive the onslaught of closeout sales from FAO, KB, etc. would be able to look forward to increased foot traffic and would also need to restock shelves after some decidedly lean and cautious years.  In contrast, the mass market manufacturers seemed to feel that this year would be “les bad” than the last two or three and that was about as bright and cheery as the majority of them seemed to get.

Toy industry hiring has kicked into high gear, we’ve had a very strong January and February and a slew of new post trade show searches being started.  This contrasts with all the talk of  “the jobless recovery” in the press and by televised talking heads.  The best explanation, as usual, comes from Alan Greenspan.  There seems to be two things going on.  Cyclical hiring is accelerating.  On a micro level we see this in our business and on a macro level it can be seen in the growth of the number of want ads.  However, this is being offset by structural changes in our economy.  The flow of high paying factory jobs which started moving overseas in the mid eighties has increased due to both NAFTA and better and cheaper communications technology.  This outflow of jobs now includes software engineers, computer operations and call centers.

While Wall Street types and economists (smug up until the day they have to start operating a spatula) will tell you that this means decreased prices for American consumers, this is only half right.  Much of the cost savings goes to increased profit margins and drops to the bottom line.  Also, things had better cost less so that underemployed and unemployed consumers can afford to buy them at all.  This is not politics but basic common sense economics.

The toy industry has experienced some of these same trends.  Except for large blow molding plants and some game and puzzle facilities, toy factories have long since gone overseas.  Since the early nineties, probably two thirds of the engineering jobs have moved to Asia.  There has been some movement of product design jobs moving offshore but not at an alarming rate.  Also, some graphics jobs have moved, but mainly in the area of production.  Job loss in the design area has been more affected by productivity gains due to computerized design technology.  We don’t have to draw everything by hand anymore.

While less retailers, to a degree, means less sales jobs; this has been partially offset by the fact that the remaining retailers demand more and more personal attention.  We no longer have “the Target sales guy” but the “Target team.”  Marketing and Brand Management jobs have actually increased, as somebody has to keep all these balls in the air and moving in the right direction.  Sales and Marketing jobs look pretty solid over the middle to long term.

So, if you’ve got a kid in college, point him towards marketing or if he’s got a winning personality, make sure that he’s more than a little familiar with the geography of Arkansas.

All the best,

Tom Keoughan