The U.S economy is shaped by a number of factors.

The war in Iraq and global anxiety rankle the business environment and influence employment and consumer spending. Correctly reading trends in the economy can make or break a business. Where can an engineering manager find data that could help predict the direction of the economy? Answer 2.2 there are leading and trailing indicators for the economy. The 2001 U.S recession differed from other in its cause, severity, and scope. According a recent assessment (stock and Watson 2003), many of the commonly used indicators did not forecast well. These indicators include stock prices, unemployment, claims, housing starts, orders for new capital equipment and consumer sentiment. Gene Sperling, who served as Director of President Clintons Counsil of Economic Advisors, offers some advice for business leaders to get ahead of the competition becoming their own economist (Sperling 2000). Specifically, he suggest that the following set of indicators be used: (1).CEO opinion, (2) temporary jobs, (3) consumer spending, (4) bank loans, (5) semiconductors, (6) commercial structures, and (7) housing markets. 2.7.2 Action Planning Another important activity related to planning is action planning, the process of establishing specific objectives , action steps, and a schedule and budget related to a predetermined programs, task, or project (Kerzner 2003). Action planning helps to focus on critical areas that need attention and action. The identification of critical areas enables the company management to pay attention primarily to planning for deviation that may arisethe principle of management by exception. Furthermore, action planning states specific results to be accomplished. Defining result to be accomplished requires the planner to make judicial selection and exercise judgment. In addition, action planning provides standards as milestones that facilitate control and clarify accountability for results. It also permits an effective delegation of responsibilities (who is responsible for what results), encourages teamwork, and ensures an evaluation of the overall performance of the program, task, or project on a continuous basis. Action planning mandates engineering managers to take the following specific steps: 1. Analyze critical needs. Critical needs are those associated with staff development, staff maintenance, and staff deficiency, as well as those related to special assignments. Managers define these needs by reviewing standards related to position charters, duties, management expectation, and company goals. Short term needs must be in balance with long term needs. 2. Define specific objectives. Specific objectives need to be defined to satisfy the critical needs. The results statement (who will attain what desirable results by when) must be specific. Establishing objectives predetermines the results to be accomplished. 3. Define standards. Standards measure the attainment of the objectives. The standards should preferably be quantitative in terms of performance ratios, percentages, cost figures, resource parameters, and other factors in order to be measurable (Kaplan and Norton 1992). 4. Define key action steps. The definition of key action steps establishes the sequence and priority of steps required to attain objectives. Specifically, major steps are lined up in the order in which they are to be performed; this list includes the evaluation of risk for the step planned, the definition of contingency

steps to ensure the expected results, and the specification of who is responsible for each step and who is accountable for achieving the target value associated with each step. Action steps must be reasonable implementable. After the expected result are defined, engineering managers should plan this steps with the active participation of involve workers to benefit from their creativity and expertise in the subject. 5. Create a schedule. Scheduling establishes both a time sequence for action steps and the interrelationship among the step, as some might be prerequisites for others. It is advisable to estimate the optimistic (earliest), pessimistic (latest), and the most likely (most probable) dates of possible completion of each step. Doing so will permit a more realistic modelling of the project schedule. Sufficient scheduling flexibility should be included to account for contingency- more for project related to new development and less for routine design and analysis work. Contingency refers to the slag and cost buffers introduced to account for undefinable, yet generally anticipated, deviations from the plan. The most important outcome of the scheduling effort is the definition of the project or program completion date. The engineering manager, as the leader, is accountable for completing the project or program on time. 6. Develop a budget. Budgeting allocates resources necessary to accomplish objectives. The planner determines the basic units (man-hours, man-weeks) to accomplished each task, estimate total resources needed for the project, and adds a contingency to the total amount for potential deviation (e.g, 7 to 10percent of the total budget, dependent on the customary percentages used in each industry) to arrive at a total budget. The budget estimate is typically the basis for seeking management approval for the project or program. The project leader is accountable for completing the project or program within the approved budget. For complex projects that involve many participants (e.g., peer department, external supplier, and outsourcing service organization) project management tools such as PERT or CPM may be applied. These tools produce timeless, graphically diagram the tasks network to facilitate monitoring and control, and determine the task linked along the critical path. Consequently, the shortest time in which the project can be completed can be determined. Manager are then reminded to monitor these critical-path task carefully in order to avoid project delays. A well-developed project plan serves the purpose of promoting communication, monitoring progress, evaluating performance, and managing knowledge.