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Manufacturing Biweekly Update

January 21, 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 down
Productivity up up
Exports down up
Goods Shipments down up


Biweekly Notes

US Manufacturing creates more jobs than it eliminates

U.S. manufacturing, viewed as a lost cause by many Americans, has begun creating more jobs than it eliminates for the first time in more than a decade. As the economy recovered and big companies began upgrading old factories or building new ones, the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997, government data show. That total will grow again this year, according to economists at IHS Global Insight and Moody's Analytics. The economists' projections for this year—calling for a gain of about 2.5%, or 330,000 manufacturing jobs—won't come close to making up for the nearly six million lost since 1997. But manufacturing should be at least a modest contributor to total U.S. employment in the next couple of years, these economists say. After a steep slump during the recession, manufacturing is "the shining star of this recovery," says Thomas Runiewicz, an economist at IHS. He expects total U.S. manufacturing jobs this year to rise to about 12 million.

(The Wall Street Journal| January 19, 2011)
The Wall Street Journal

Fed: Economy Expanded on Manufacturing, Holiday Spending

The Federal Reserve said holiday-season spending and increased manufacturing drove an economic expansion across the U.S. in November and December, with businesses cautiously optimistic about their 2011 outlooks. Six Fed regions including Atlanta and Chicago showed economies growing “modestly to moderately,” and four areas including New York and Boston had “improving” conditions, the Fed said today in its anecdotal Beige Book report. The Minneapolis region “continued its moderate recovery,” and San Francisco “firmed further,” the central bank said.

(Bloomberg News| January 12, 2011)
www.bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • 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

  • 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 updated

  • In December 2010, manufacturing production was up 0.4 percent from previous month and was 5.8 percent above its year-earlier level.

  • Production of durable goods was up 0.4 percent from the previous month. The durable industry that registered increases in output included primary metal (3.7 percent), computer and electronic products (1.7 percent), machinery (0.2 percent), and miscellaneous (0.1 percent). The durable industry that registered decreases in output included nonmetallic mineral products (-1.6 percent), electrical equip., appliances, and components (-0.7 percent), aerospace and miscellaneous transportation equipment (-0.7 percent), wood products (-0.5 percent), and motor vehicles and parts (-0.2 percent). Meanwhile, there was no change of output in fabricated metal products.

  • Production of nondurable goods was up 0.5 percent from previous month. The nondurable manufacturing industries that registered increases in output included petroleum and coal products (2.4 percent), plastics and rubber products (1.5 percent), apparel and leather (1.2 percent), and chemical (1.0 percent). The nondurable industry that registered decreases in output included printing and support (-1.9 percent), textile and product mills (-0.8 percent), and paper (-0.6 percent). There was no change in output in food, beverage, and tobacco products.

  • Index for other manufacturing industries (non-NAICS) remained the same.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released January 14, 2011; next release is February 16, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In December 2010, manufacturing industries (NAICS based) operated at 73.5 percent of capacity, 5.5 percentage points below their 1972-2009 average of 79.0 percent and 0.3 percent points higher than their revised capacity utilization level in November 2010.

  • In December 2010, durable manufacturing, capacity utilization operated at 71.2 percent capacity, up 0.2 points from previous month (revised). Increased capacity utilization was registered in primary metal (2.4 points), computer and electronic products (0.8 points), machinery (0.2 points), furniture and related products (0.2 points), and fabricated metal products (0.1 points). Decreased capacity utilization was demonstrated in nonmetallic mineral products (-0.8 points), aerospace and miscellaneous transportation equipment (-0.7 points), electrical equip., appliances, and components (-0.5 points), and miscellaneous (-0.2 points). There was no change in wood products and motor vehicles and parts.

  • In December 2010, non-durable manufacturing, capacity utilization increased 0.5 percentage points in from previous month (revised) to 76.5 percent. Increased capacity utilization was registered in petroleum and coal products (2.1 points), apparel and leather (1.5 points), plastics and rubber products (1.0 points), and chemical (0.9 points). Decreased capacity utilization was registered in printing and support (-1.1 points), paper (-0.4 points), textile and product mills (-0.3 points), and food, beverage, and tobacco products (-0.1 points).

  • The index for other manufacturing industries (non-NAICS) declined 0.1 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released January 14, 2011; next release is February 16, 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 updated

  • Year to date November 2010, U.S. manufactured goods exports accounted for 80.3 percent of all U.S. exports of goods, compared with 81.5 percent a year ago.

  • Manufactured goods exports in November were 5.2 percent lower than the previous month. Imports were down 1.4 percent.

  • The year to date November 2010 trade deficit in manufactured goods of $382.2 billion was $84.5 billion more when compared with $297.7 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB11-08, BEA11-01, FT-900(10-11),” released January 13, 2011; next release is February 11, 2011)
    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 updated

  • In December 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.2 percent compared to previous month.

  • The index for finished energy goods was up 3.7 percent from previous month.

  • A seasonally adjusted increase of price from November to December was registered in home heating oil and distillates (12.3 percent), No. 2 diesel fuel (8.6 percent), gasoline price (6.4 percent), liquefied petroleum gas (4.1 percent), and residential electric power (0.7 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-0.3 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0017,” released January 13, 2011; next release is February 16, 2011)
    http://www.bls.gov/news.release/pdf/ppi.pdf

       

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Institute for Supply Management's (ISM) Index  

  • 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