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Manufacturing Biweekly Update

February 4, 2011 [past updates]


U.S. Manufacturing Trends Current Period Year-to-Date
Wage Rates up up
Profits down up
Employment up up
Production up up
Capacity Utilization up down
Productivity up up
Exports down up
Goods Shipments up up


Biweekly Notes

U.S. manufacturing profits suggest stronger economy

U.S. manufacturing companies posted higher-than-expected results, as sharply improved margins boosted profits amid strong industrial demand and growth in emerging markets. Companies including Caterpillar Inc, Tyco International Ltd and Eaton Corp reported strong sales and earnings, and investors were looking ahead for signs the industrial rebound would begin to affect the wider economy and boost employment. Caterpillar provided an encouraging sign for U.S. jobs but also showed that employment remains one of the main ways companies can control profit margins. The machinery maker, which slashed nearly 30,000 full-time and contract jobs worldwide during the recession, said it had rehired about 8,200 workers worldwide in 2010, and hired another 11,000 temporary contract workers, half in the United States. Optimism among manufacturing executives is widespread. Sixty-three percent are upbeat about U.S. economic prospects over the next 12 months, according to a quarterly survey by PricewaterhouseCoopers.

(Reuters |Yahoo News| January 27, 2011)
Yahoo.com

Unemployment falls to 9 pct., nearly 2-year low; manufacturing added 49,000 jobs

The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work. A separate Labor Department survey of company payrolls showed 36,000 net jobs created -- barely a quarter of the number needed to keep pace with population growth. In one bright spot, manufacturing added 49,000 jobs, the most since August 1998. And retailers added 28,000 jobs, the largest number in a year.

(AP |Yahoo News |January 4, 2011)
Yahoo.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In January 2011, average hourly earnings in manufacturing were $18.89, up 0.48 percent from December 2010’s $18.80 (preliminary), and up 2.44 percent from January 2010’s $18.44.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0129,” released February 4, 2011; next release is March 4, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) updated

  • In the fourth-quarter of 2010, hourly compensation from previous quarter, annual rate (preliminary) was up 2.8 percent in total manufacturing, up 2.9 percent in durable manufacturing and up 2.5 percent in nondurable manufacturing.

  • In the fourth-quarter of 2010, hourly compensation of all manufacturing workers increased 0.5 percent, compared to a 4.5 percent increase during the fourth-quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 0.7 percent in the fourth-quarter of 2010, compared to 3.0 percent increase in the fourth-quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth Quarter 2010, Preliminary,” USDL 11-0128, released February 3, 2011; next release is March 3, 2011)
    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 March 25, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_3rd.pdf

       

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Manufacturing Employment updated

  • In January 2011, manufacturing employment went up, with an increase of 49,000 jobs.

  • In January, durable goods manufacturing gained 62,000 jobs with increase in transportation equipment (19,700), fabricated metal products (12,800), machinery (10,200), computer and electronic products (4,600), wood products (3,400), nonmetallic mineral products (3,400), furniture and related products (2,500), miscellaneous manufacturing (2,200), primary metals (1,500), and electrical equipment and appliances (1,400).

  • In January, the employment level in nondurable goods manufacturing sector declined by 13,000 jobs, with decreases in beverages and tobacco products (-4,000), petroleum and coal products (-3,100), printing and related support activities (-2,800), chemicals (-2,700), food manufacturing (-2,000), paper and paper products (-900), textile product mills (-900), textile mills (-400), and leather and allied products (-400). Meanwhile, job gains occurred in plastics and rubber products (3,800), and apparel (700).

  • The manufacturing employment of 11.6 million workers represents 8.9 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-11-0129,” released February 4, 2011; next release is March 4, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • 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

  • 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 updated

  • Manufacturing sector productivity (preliminary) rose 5.8 percent in the fourth-quarter of 2010, as output increased 3.7 percent and hours decreased 2.0 percent. Productivity was up 6.0 percent in the durable goods industries and up 5.8 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 2.9 percent in the fourth-quarter of 2010 and fell 3.0 percent over the last four quarters.

  • In durable goods industries, productivity (preliminary) was up 6.0 percent from previous quarter, as output increased 4.1 percent, while hours worked decreased 1.7 percent.

  • In nondurable goods industries, productivity (preliminary) was up 5.8 percent from previous quarter, as output increased 3.2 percent, while hours worked decreased 2.4 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth-Quarter 2010 Preliminary,” USDL 11-0128, released February 3, 2011; next release is March 3, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • 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 updated

  • Shipments of manufactured durable goods in December, up three of the last four months, increased $3.2 billion or 1.6 percent to $200.8 billion, revised from the previously published 1.4 percent increase. This followed a 0.5 percent November increase. Machinery, up four of the last five months, had the largest increase, $1.7 billion or 6.6 percent to 27.1 billion.

  • In December, shipments increased in machinery (6.6 percent), transportation equipment (2.7 percent), primary metals (2.5 percent), electrical equipment, appliances, and components (1.7 percent), wood products (1.0 percent), fabricated metal products (0.8 percent), and furniture and related products (0.4 percent). Shipments decreased in computers and electronic products (-1.8 percent), miscellaneous durable goods (-0.7 percent), and nonmetallic mineral products (-0.4 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(10)-12, CB11-19),” February 3, 2011; next release is March 4, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • 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  updated

  • Economic activity in the manufacturing sector expanded in January for the 18th 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 January as the PMI registered 60.8 percent, an increase of 2.3 percentage points when compared to December's seasonally adjusted reading of 58.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

  • ?he percentage-point changes in the components of the PMI in January were: New Orders increased 5.8 points to 67.8, Employment increased 2.8 points to 61.7, Supplier Deliveries increased 1.9 points to 58.6, Inventories increased 0.6 points to 52.4, and Production increased 0.5 points to 63.5.

    U.S. Industries Reporting Growth in January 2011

    • Petroleum & Coal Products
    • Primary Metals
    • Apparel, Leather & Allied Products
    • Wood Products
    • Computer & Electronic Products
    • Transportation Equipment
    • Fabricated Metal Products
    • Machinery
    • Paper Products
    • Miscellaneous Manufacturing
    • Chemical Products
    • Furniture & Related Products
    • Food, Beverage & Tobacco Products
    • Electrical Equipment, Appliances & Components

    (Institute for Supply Management, data released February 1, 2011; next release is March 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