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Manufacturing Biweekly Update

January 7, 2011 [past updates]


U.S. Manufacturing Trends Current Period Year-to-Date
Wage Rates no change up
Profits down up
Employment down up
Production up up
Capacity Utilization up up
Productivity up up
Exports up up
Goods Shipments down up


Biweekly Notes

Manufacturing grows, bolsters 2011 outlook

U.S. manufacturing grew at its fastest pace in seven months in December, extending a recent run of encouraging economic data and suggesting that expansion of the world's biggest economy will accelerate in 2011. The Institute for Supply Management's national factory activity index rose to 57 from 56.6 in November, marking the 17th consecutive month of growth in the manufacturing industry, with a rise in new orders providing momentum for further growth. A separate report on Monday showed construction spending hit a five-month high in November, more evidence that the U.S. economy picked up steam in the final quarter of last year. Monday's data dovetailed with strong readings on employment and consumer spending over the last few months of 2010, leading economists to bet a fragile U.S. recovery may this year finally turn into self-sustaining growth.

(Reuters| Yahoo News| January 3, 2011)
Yahoo News

U.S. adds 103,000 Jobs; Manufacturing payrolls rose by 10,000

Employers in the U.S. added fewer jobs than forecast in December and the unemployment rate dropped, partly reflecting a shrinking workforce, a sign the labor-market recovery will take time to develop. Payrolls increased 103,000, compared with the median forecast of 150,000 in a Bloomberg News survey, Labor Department figures showed today in Washington. The jobless rate fell to 9.4 percent, the lowest level since May 2009. Manufacturing payrolls rose by 10,000 in December. Economists had projected an increase of 5,000.

(Bloomberg News| January 7, 2011)
www.bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In December 2010, average hourly earnings in manufacturing remained the same as in previous two months at $18.66 (preliminary), and up 1.52 percent from December 2009’s $18.38.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0002,” released January 7, 2011; next release is February 4, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • During the third quarter of 2010, hourly compensation from previous quarter, annual rate (revised) was up 1.6 percent in total manufacturing, up 0.8 percent in durable manufacturing and up 2.4 percent in nondurable manufacturing.

  • In the third quarter of 2010, hourly compensation of all manufacturing workers increased 1.0 percent (revised), compared to a 5.2 percent increase during the third quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 0.3 percent (revised) in the third quarter of 2010, compared to 6.9 percent increase in the third quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2010, Revised,” USDL 10-1661, released December 1, 2010; next release is February 3, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the third quarter of 2010, manufacturing profits decreased 2.9 percent, or $7.9 billion, to $269.2 billion from $277.1 billion in the first quarter. Compared with third quarter profits of 2009, manufacturing profits were up $117.4 billion in the third quarter of 2010.

  • Third quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) decreased $0.7 billion from the second quarter of 2010 to $1,033.3 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-54,” released December 22, 2010; next release is January 28, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_3rd.pdf

       

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Manufacturing Employment updated

  • In December, 2010, manufacturing employment went up, with an increase of 10,000 jobs.

  • In December, durable goods manufacturing gained 10,000 jobs with increase in transportation equipment (5,500), fabricated metal products (4,100), computer and electronic products (3,600), electrical equipment and appliances (2,700), primary metals (900), and wood products (200). Job lost occurred in machinery (-2,800), nonmetallic mineral products (-2,400), furniture and related products (-1,500), and miscellaneous manufacturing (-800).

  • In December, employment level in nondurable goods manufacturing sector remained the same, with increases in plastics and rubber products (3,600), food manufacturing (2,400), apparel (1,300), textile mills (1,000), leather and allied products (300), and paper and paper products (200). Job lost occurred in printing and related support activities (-4,000), beverages and tobacco products (-1,900), petroleum and coal products (-1,800), and chemicals (-900). There was no change in employment in textile product mills.

  • The manufacturing employment of 11.7 million workers represents 8.9 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-11-0002,” released January 7, 2010; next release is February 4, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In November 2010, manufacturing production was up 0.3 percent from previous month and was 5.3 percent above its year-earlier level.

  • Production of durable goods was up 0.4 percent from the previous month. The durable industry that registered gains included primary metals (3.3 percent); wood products (1.6 percent); fabricated metal products (1.3 percent); electrical equipment, appliances, and components (1.2 percent); machinery (1.2 percent); computer and electronic products (1.1 percent); miscellaneous manufacturing (1.1 percent); aerospace and miscellaneous transportation equipment (0.9 percent); and furniture and related products (0.7 percent). Motor vehicles and parts declined -6.0 percent while Nonmetallic mineral products declined 0.3 percent, the only durable manufacturing industries that registered decreases in output.

  • Production of nondurable goods was up 0.2 percent from previous month. The nondurable manufacturing industries that registered increases in output included printing and support (1.6), paper (1.5 percent), plastics and rubber products (1.1 percent), chemicals (0.6 percent), and petroleum and coal products (0.4 percent), The nondurable industry that registered decreases in output included textile and product mills (-2.2 percent); food, beverages, and tobacco products (-0.7 percent); and apparel and leather (-0.5 percent).

  • Index for other manufacturing industries (non-NAICS) declined 0.7 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released December 15, 2010; next release is January 14, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In November 2010, manufacturing industries (NAICS based) operated at 73.2 percent of capacity, 5.8 percentage points below their 1972-2009 average of 79.0 percent and 0.3 percent points higher than their revised capacity utilization level in October 2010.

  • In November 2010, durable manufacturing, capacity utilization operated at 70.9 percent capacity, up 0.2 points from previous month (revised). Increased capacity utilization was registered in primary metal (2.1 points); wood products (1.3 points); fabricated metal products (1.1 points); machinery (1.0 point); electrical equipment, appliances, and components (0.9 points); furniture and related products (0.8 points); aerospace and miscellaneous transportation equipment (0.5 points); miscellaneous (0.5 points); and computer and electronic products (0.3 points). Decreased capacity utilization was demonstrated in motor vehicles and parts (-3.7 points). There was no change in nonmetallic mineral products.

  • In November 2010, non-durable manufacturing, capacity utilization increased 0.3 percentage points in from previous month (revised) to 76.0 percent. Increased capacity utilization was registered in paper (1.3 points), printing and support (1.2 points), plastics and rubber products (0.6 points), chemical (0.5 points), petroleum and coal products(0.5 points), and apparel and leather (0.1 points). Decreased capacity utilization was only registered in textile and product mills (1.3 points) and food, beverage and tobacco products (0.6 points).

  • The index for other manufacturing industries (non-NAICS) declined 0.5 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released December 15, 2010; next release is January 14, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity (Revised) rose 0.6 percent in the third quarter of 2010, as output increased 4.2 percent and hours increased 3.6 percent. Productivity was down 0.5 percent in the durable goods industries and up 3.2 percent in the nondurable goods industries. Unit labor costs in manufacturing increased 1.0 percent in the third quarter of 2010 and fell 2.9 percent over the last four quarters.

  • In durable goods industries, productivity (revised) was down 0.5 percent from previous quarter, as output increased 6.0 percent, while hours worked increased 6.5 percent.

  • In nondurable goods industries, productivity (revised) was up 3.2 percent from previous quarter, as output increased 2.2 percent, while hours worked decreased 0.9 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2010 Revised,” USDL 10-1661, released December 1, 2010; next release is February 3, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Year to date October 2010, U.S. manufactured goods exports accounted for 80.6 percent of all U.S. exports of goods, compared with 81.8 percent a year ago.

  • Manufactured goods exports in October were 5.9 percent higher than the previous month. Imports were also up 4.1 percent.

  • The year to date October 2010 trade deficit in manufactured goods of $338.5 billion was $75.6 billion more when compared with $262.9 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-185, BEA10-56, FT-900(10-10),” released December 10, 2010; next release is January 13, 2010)
    http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in November, also down three of the last four months, decreased $0.7 billion or 0.3 percent to $195.8 billion. This followed a 1.0 percent October decrease.

  • In November, shipments increased in primary metals (3.1 percent); machinery (1.3 percent); electrical equipment, appliances, and components (0.3 percent) and fabricated metal products (0.2 percent). Shipments decreased in transportation equipment (-3.3 percent) and computers and electronic products (-0.8 percent).

    ((Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-10, CB10-176),” December 23, 2010; next release is Jan. 27, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In November 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.3 percent compared to previous month.

  • The index for finished energy goods was up 2.1 percent from previous month.

  • A seasonally adjusted increase of price from October to November was registered in liquefied petroleum gas (5.9 percent), gasoline price (4.7 percent), No. 2 diesel fuel (4.8 percent), and home heating oil and distillates (7.0 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-2.2 percent), and residential electric power (-0.2 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-1599,” released December 14, 2010; next release is January 13, 2011)
    http://www.bls.gov/news.release/pdf/ppi.pdf

       

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Institute for Supply Management's (ISM) Index  updated

  • Economic activity in the manufacturing sector expanded in December for the 17th consecutive month, and the overall economy grew for the 20th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in December as the PMI registered 57 percent, an increase of 0.4 percentage point when compared to November's reading of 56.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

  • The percentage-point changes in the components of the PMI in December were: New Orders increased 4.3 points to 60.9, Production increased 5.7 points to 60.7, Employment decreased 1.8 points to 55.7, Inventories down 4.9 points to 51.8, and Supplier Deliveries down 1.3 points to 55.9.

    U.S. Industries Reporting Growth in December 2010

    • Apparel, Leather & Allied Products
    • Primary Metals
    • Fabricated Metal Products
    • Machinery
    • Computer & Electronic Products
    • Food, Beverage & Tobacco Products
    • Textile Mills
    • Plastics & Rubber Products
    • Transportation Equipment
    • Electrical Equipment, Appliances & Components
    • Chemical Products

    (Institute for Supply Management, data released January 3, 2011; next release is February 1, 2011)
    http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

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Prepared by
Director of Office of Trade Industry Information
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-4691