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Manufacturing Biweekly Update

February 18, 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 up
Productivity up up
Exports up up
Goods Shipments up up


Biweekly Notes

Factories in Philadelphia Area Expand at Faster Pace

Manufacturing in the Philadelphia region expanded in February at the fastest pace in seven years, underscoring factories’ contribution to the economic expansion. The Federal Reserve Bank of Philadelphia’s general economic index rose to 35.9, the highest level since January 2004 and exceeding the median forecast of 21 in a Bloomberg News survey of economists. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. Demand for new equipment and more exports is supporting manufacturers like Dell Inc. and Parker Hannifin Corp. Increased consumer spending, the largest part of the economy, could lead to faster job growth as factories continue to expand.

(Businessweek| Bloomberg | February 17, 2011)
Businessweek.com

Industrial Production in U.S. Fell 0.1% in January While Manufacturing rose 0.3%

Industrial production unexpectedly dropped in January, dragged down by a decline in utilities as milder temperatures curbed demand for heating. Output fell 0.1 percent after a 1.2 percent increase in December that was larger than initially reported, figures from the Federal Reserve showed today. Utilities and mining fell, while manufacturing, which makes up 75 percent of the total, rose 0.3 percent. Economists had forecast a 0.5 percent gain in overall production, according to the median estimate in a Bloomberg News survey.

(Bloomberg |February 16, 2011)
bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • 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)

  • 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

  • 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 updated

  • In January 2011, manufacturing production was up 0.3 percent from previous month and was 5.5 percent above its year-earlier level.

  • Production of durable goods was up 0.6 percent from the previous month. The durable industries that registered increases in output included motor vehicles and parts (3.2 percent), machinery (1.3 percent), computer and electronic products (0.9 percent), aerospace and miscellaneous transportation equipment (0.7 percent), Furniture and related products (0.4 percent), fabricated metal products (0.3 percent),and miscellaneous (0.2 percent). The durable industries that registered decreases in output included wood products (-1.3 percent), nonmetallic mineral products (-1.0 percent), electrical equip., appliances, and components (-1.0 percent), and primary metal (-0.9 percent).

  • Production of nondurable goods was down 0.1 percent from previous month. The nondurable manufacturing industries that registered increases in output included apparel and leather (1.2 percent), plastics and rubber products (0.6 percent), chemical (0.1 percent), and paper (0.1 percent). The nondurable industries that registered decreases in output included petroleum and coal products (-1.0 percent), printing and support (-0.8 percent), textile and product mills (-0.4 percent), and food, beverage, and tobacco products (-0.3 percent).

  • Other manufacturing industries (non-NAICS) was up 0.3 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released February 16, 2011; next release is March 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In January 2011, manufacturing industries (NAICS based) operated at 74.0 percent of capacity, 4.9 percentage points below their 1972-2009 average of 78.9 percent and 0.1 percent points higher than their revised capacity utilization level in December 2010.

  • In January 2011, durable manufacturing, capacity utilization operated at 71.9 percent capacity, up 0.4 points from previous month (revised). Increased capacity utilization was registered in motor vehicles and parts (1.7 points), machinery (1.1 points), aerospace and miscellaneous transportation equipment (0.5 points), computer and electronic products (0.4 points), fabricated metal products (0.3 points), furniture and related products (0.3 points), and miscellaneous (0.2 points). Decreased capacity utilization was registered in electrical equip., appliances, and components (-0.8 points), primary metal (-0.7 points), wood products (-0.6 points), and nonmetallic mineral products (-0.4 points).

  • In January 2011, non-durable manufacturing, capacity utilization decreased 0.2 percentage points in from previous month (revised) to 76.6 percent. Increased capacity utilization was registered in apparel and leather (0.9 points) and plastics and rubber products (0.5 points). There was no change in paper and chemical. Decreased capacity utilization was registered in petroleum and coal products (-0.9 points) printing and support (-0.6 points), food, beverage, and tobacco products (-0.5 points), and textile and product mills (-0.4 points).

  • The index for other manufacturing industries (non-NAICS) increased 0.2 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released February 16, 2011; next release is March 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • 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 updated

  • Manufactured goods exports in December were 4.3 percent higher than the previous month. Imports were down 5.0 percent.

  • Year to date December 2010, U.S. manufactured goods exports accounted for 80.1 percent of all U.S. exports of goods, compared with 81.4 percent a year ago.

  • The year to date December 2010 trade deficit in manufactured goods of $415.7 billion was $89.4 billion more when compared with $326.2 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB11-26, BEA11-04, FT-900(10-12),” released February 11, 2011; next release is March 10, 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 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 updated

  • In January 2011, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.5 percent compared to previous month.

  • The index for finished energy goods was up 1.8 percent from previous month.

  • A seasonally adjusted increase of price from December to January was registered in no. 2 diesel fuel (7.2 percent), gasoline price (6.9 percent), and home heating oil and distillates (1.2 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-1.9 percent), liquefied petroleum gas (-1.2 percent), and residential electric power (-1.1 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0202,” released February 16, 2011; next release is March 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 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