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Manufacturing Biweekly Update

February 17, 2012 [past updates]


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


Biweekly Notes

Manufacturers providing outsize boost to economy

WASHINGTON (AP) — American factories are humming — and driving the economy forward. Manufacturers have been hiring more consistently than other employers, for jobs with better-than-average pay. They just had their best month of growth in five years. And more factory output has raised demand in some other industries, such as shipping, leading to further hiring. "The manufacturing sector is on a tear," said Paul Ashworth, an economist at Capital Economics. It's an optimistic theme that serves President Barack Obama's political needs. On Wednesday, Obama traveled to Milwaukee to salute a company that brought jobs back to the United States. The president has promoted the nation's manufacturing base as an engine of growth and as evidence of a recovering economy. No one thinks manufacturing will return to its 1950s peak. After all, the factory sector now makes up barely one-tenth of the economy. But since the recession ended more than 2˝ years ago, factories have been contributing disproportionately to the recovery in hiring and the overall economy.
(timesunion.com|February 17, 2012)
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U.S. Manufacturing Rebounds, Adds 287,000 New Jobs

DAYSBURG, Pa. | Don't tell Michael W. McLanahan that manufacturing in the United States is dead. His family-owned, privately held company has made mineral processing and farm equipment since its founding way back in 1835 — and is enjoying a boom. "It was our best year ever," said McLanahan, during a tour of the busy factory in central Pennsylvania that illustrates why manufacturing is growing twice as fast as the broader economy. McLanahan, 73, is the fifth generation of his family to run the capital-intensive company. It builds equipment to help mining companies separate product from waste, the dairy industry to remove manure from sand and the energy sector to segregate gravel from silica sand used in fracking — the process of drilling through shale deposits thousands of feet below ground to reach natural gas. McLanahan Corp. boomed even as U.S. economy struggled to gain momentum in 2011 and the global economy was panicked and fearful that Europe's debt problems would drag everyone down. One important reason for McLanahan's success — and for U.S. manufacturing's rising luster — is an export revival.
(The.Ledger.com| February 15, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In January 2012, average hourly earnings in manufacturing were $19.08 (preliminary), up 0.1 percent from previous month, and up 1.06 percent from January 2011’s $18.88.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-0163,” released February 3, 2012; next release is March 9, 2012)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the fourth-quarter of 2011, hourly compensation from previous quarter, annual rate (preliminary) was up 1.2 percent in total manufacturing, up 0.2 percent in durable manufacturing and up 2.7 percent in nondurable manufacturing.

  • In the fourth-quarter of 2011, hourly compensation of all manufacturing workers increased 0.6 percent, compared to a 1.2 percent increase during the fourth-quarter of 2010. Real hourly compensation in the total manufacturing sector decreased -2.6 percent in the fourth-quarter of 2011, compared with change in the fourth-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth Quarter 2011, Preliminary” USDL 12-0162, released February 2, 2012; next release is March 7, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the third quarter of 2011, manufacturing profits increased 7.32 percent, or $18.3 billion, to $268.2 billion from $249.9 billion in the first quarter. Compared with third quarter profits of 2010, manufacturing profits were up $41.0 billion in the third quarter of 2011.

  • Third quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $22 billion from the second quarter of 2011 to $967.9 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-63,” released December 22, 2011; next release is March 29, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp3q11_3rd.pdf

       

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Manufacturing Employment

  • In January 2012, manufacturing employment went up, with an increase of 50,000 jobs.

  • In January, durable goods manufacturing gained 44,000 jobs with increases in fabricated metal products (10,900), machinery (10,500), transportation equipment (10,300), miscellaneous manufacturing (5,300), wood products (3,100), nonmetallic mineral products (2,300), primary metals (1,700), furniture and related products (1,500), and electrical equipment and appliances (900). However, job loss occurred in computer and electronic products (-1,900).

  • In January, nondurable goods manufacturing gained 6000 jobs with increases in chemicals (2,200), printing and related support activities (1,700), beverages and tobacco products (1,300), petroleum and coal products (1,100), textile mills (700), leather and allied products (500), and apparel (100). However, job loss occurred in plastics and rubber products (-1,000), paper and paper products (-800), and textile product mills (-300). Meanwhile, there was no change of employment in food manufacturing.

  • The manufacturing employment of 11.9 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-0163,” released February 3, 2012; next release is March 9, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production UPDATED

  • In January 2012, manufacturing production was up 0.7 percent from previous month and was 4.5 percent above its year-earlier level.

  • Production of durable goods was up 1.8 percent from the previous month. The durable industries that registered increases in output included fabricated metal products (1.2 percent), machinery (2.2 percent), computer and electronic products (1.4 percent), electrical equip., appliances, and components (1.4 percent), motor vehicles and parts (6.8 percent), miscellaneous (2.0 percent), and aerospace and miscellaneous transportation equipment (.1 percent) and furniture and related products (1.1 percent). The durable industries that registered decreases in output included wood products (-1.5 percent), nonmetallic mineral products (-1.1 percent), primary metals (-.6 percent).

  • • Production of nondurable goods was down -.2 percent from the previous month. The nondurable manufacturing industries that registered increases in output included textile and product mills (.2 percent), apparel and leather (1.9 percent), paper (.7 percent), printing and support (1.2 percent), chemicals (.3 percent), and plastics and rubber products (.4 percent), The nondurable industries that registered decreases in output included food, beverage and tobacco products (-0.6 percent), petroleum and coal products (-2.3 percent).

  • • Other manufacturing industries (non-NAICS) was down (-.1 percent).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released February 15, 2012; next release is March 16, 2012)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization UPDATED

  • In January 2012, manufacturing industries (NAICS based) operated at 77.4 percent of capacity, 1.3 percentage points below their 1972-2011 average of 78.7 percent, and 0.5 percent above the revised capacity utilization level in December 2011.

  • In January 2012, durable manufacturing, capacity utilization operated at 77.0 percent capacity, up 1.3 points from previous month. Increased capacity utilization was registered in fabricated metal products (.9 points), machinery (1.7 points), computer and electronic products (0.6 points), electrical equip., appliances, and components (1.1), motor vehicles and parts (4.6 points), furniture and related products (.9 points), fabricated metal products (.9 points), miscellaneous (1.3 points), and computer and electronic products (0.6 points). Decreased capacity utilization was registered in wood products (-.9 points), and nonmetallic mineral products (-0.4 points), and primary metals (-.4 points) There was no change in capacity utilization for aerospace and miscellaneous transportation equipment for the month.

  • In December 2012, non-durable manufacturing, capacity utilization operated 78.0 percent capacity, down 0.2 percent from the previous month. Increased capacity utilization was registered in textile and product mills (0.2 points), apparel and leather (1.3 points), in paper (0.7 points), printing and support (0.9 points), chemicals (0.2 points), and plastics and rubber products (.2 points). Decreased capacity utilization was registered in food, beverage, and tobacco products (-0.5 points) and petroleum and coal products (-2.1 points).

  • The index for other manufacturing industries (non-NAICS) was unchanged.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released February 15, 2011; next release is March 16, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity was down (-0.4 percent) in the fourth-quarter of 2011, as output increased (3.8 percent) and hours increased (4.2 percent). Productivity was down (-0.4 percent) in the durable goods industries and up (1.3 percent) in the nondurable goods industries. Unit labor costs in manufacturing increased (1.6 percent) in the fourth-quarter of 2011, and decreased (-1.1 percent) over the last four quarters.

  • In durable goods industries, productivity was down (-0.4 percent) from previous quarter, as output increased (6.3 percent), while hours worked increased (6.7 percent).

  • In nondurable goods industries, productivity was up (1.3 percent) from previous quarter, as output increased (1.5 percent), and hours worked increased (0.2 percent).

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth-Quarter 2011, Preliminary,” USDL 12-0162, released February 2, 2012; next release is March 7, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade UPDATED

  • Manufactured goods exports in December 2011 were 1.27 percent higher than the previous month. Imports were 5.30 percent lower.

  • In 2011, U.S. manufactured goods exports accounted for 85.6 percent of all U.S. exports of goods, compared with 86.1 percent a year ago.

  • The 2011 trade deficit in manufactured goods of $448.7 billion was $36.7 billion more when compared with $412.0 billion a year ago.

    (USA Trade Online, U.S. Census Bureau, released February 10, 2012; Next release is March 09, 2012)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in December, up two of the last three months, increased $4.4 billion or 2.2 percent to $207.5 billion, revised from the previously published 2.1 percent increase. This followed a 0.2 percent November decrease.

  • In December, shipments increased in primary metals (8.7 percent), machinery (4.3 percent), fabricated metal products (1.3 percent), furniture and related products (1.3 percent), nonmetallic mineral products (1.1 percent), transportation equipment (0.9 percent), miscellaneous durable goods (0.4 percent), and electrical equipment, appliances, and components (0.2 percent). However, shipments decreased in wood products (-1.5 percent), and computers and electronic products (-0.6 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-12, CB12-24),” February 3, 2012; next release is March 5, 2012)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices UPDATED

  • In January 2012, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.4 percent compared to previous month.

  • The index for finished energy goods was down 0.5 percent from previous month.

  • A seasonally adjusted decrease in price from December to January was registered in residential electric power (-1.7 percent), home heating oil and distillates (-2.9 percent), residential gas (-3.4 percent), and liquefied petroleum gas (-2.3 percent). An increase in price was registered in no. 2 diesel fuel (5.2 percent), and gasoline price (2.0 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 12-0060,” released February 16, 2012; next release is March 16, 2012)
    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 January for the 30th consecutive month, and the overall economy grew for the 32nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in January as the PMI registered 54.1 percent, an increase of 1 percentage point when compared to December's seasonally adjusted reading of 53.1 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 January were Inventories, +4.0 points increase to 49.5; New Orders +2.8 points increase to 57.6; Supplier Deliveries, +2.1 increase to 53.6; Production, -3.2 points decrease to 55.7; Employment, -0.5 points decrease to 54.3.

    U.S. Industries Reporting Growth in January 2012

    • Apparel, Leather & Allied Products
    • Petroleum & Coal Products
    • Machinery
    • Computer & Electronic Products
    • Transportation Equipment
    • Miscellaneous Manufacturing
    • Fabricated Metal Products
    • Paper Products
    • Primary Metals

    (Institute for Supply Management, data released February 1, 2012; next release is March 1, 2012)
    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