Just how worrying depends on the degree level—bachelor's, master's or doctorate.

According to a February report by Engineering Trends, U.S. universities are awarding more engineering Ph.D.s than in the past. However, the report's authors predict that those gains will be lost because there aren't enough engineering students in the pipeline.

"The problems have taken root and they will be difficult to deal with," said Richard Heckel, founder and technical director of Engineering Trends, a consulting firm specializing in engineering education.

Small but steady declines in bachelor's degrees have occurred in the past three academic years. In 2004-05, some 76,632 engineering bachelor's degrees were awarded. In 2005-06, the number dropped slightly to 76,301. In 2006-07, it again decreased to 75,113.

Increases in undergraduate enrollment occurred in freshmen classes in fall 2006, but second-, third- and fourth-year enrollments declined. That means the pattern of slowly declining degree numbers should continue for another three or four years, Heckel said.

Computer and electrical engineering bachelor's degrees were no exception to the rule. Graduates numbered 14,584 in 2004-05, but declined to 14,209 in 2005-06 and 13,783 in 2006-07.

Master's degrees also dropped in the same time period, recording a significant decrease from 41,087 in 2004-05 to 38,451 in 2005-06, followed by a smaller decrease to 37,320 in 2006-07.

But master's programs reported a 2 percent increase in fall 2006 enrollment, meaning there could be a turnaround in the works, with graduation rates increasing again in 2008-09.

While doctoral programs report growth in enrollment, it's at a lower rate than before. In academic year 2001-02, there was a meteoric rise from 5,863 Ph.D.s awarded to 8,559 in 2006-07. But the rate of increase began to slow in 2006-07. Based on enrollment figures, the slowdown is expected to continue.

EE doctorates went from 13,083 in 2001-02 to 20,072 in 2006-07, but that's not a reason to celebrate, according to Heckel. "If you look at those numbers, you'd say, 'Wow, there's no stopping us'. But all those increases came from the increases in enrollment several years before," he said.

A reduced rate of doctoral degrees should begin next year and continue for at least three years, Heckel added.

Look to the overall economy to partly explain the problem, said Paul Kostek, IEEE-USA's vice president for communications. "The trend there would be that, as engineering and computer science employment decreases, or is perceived to decrease, enrollments go down," Kostek said.

Perceptions of fewer jobs due to outsourcing can become a self-fulfilling prophecy, he added. While there's plenty of talk about outsourcing as a threat to jobs, there's not much discussion of "insourcing" as a job creation engine, Kostek added.

Emerging countries such as India and China are granting more engineering degrees than ever before, but they're also building their industrial presence here. That means more jobs, Kostek said.

Meanwhile, fewer available qualified engineers means more responsibility for the less-experienced, said Albert Helfrick, chair of electrical and systems engineering at Embry-Riddle Aeronautical University (Daytona Beach, Fla.)

The population of experienced engineers is aging, he said. "There's a serious problem in our country with people like me: gray-haired people who could retire tomorrow," Helfrick said. If large numbers do retire, the U.S. faces a severe engineering shortfall.