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Manufacturing Biweekly Update

April 1, 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 down down
Goods Shipments up up


Biweekly Notes

US Manufacturing Sector Grew Slower in March

The U.S. manufacturing sector grew at a marginally slower pace in March after accelerating at its fastest rate in nearly seven years the month before, according to an industry report released on Friday. The Institute for Supply Management (ISM) said its index of national factory activity dipped to 61.2 last month from 61.4 in February, roughly in line with economists' expectations for a reading of 61.0. U.S. construction spending fell more than expected in February to its lowest level since October 1999, a government report showed, pulled down by weakness in both public and private construction.

(CNBC |April 1, 2011)
cnbc.com

US jobless rate falls to two-year low of 8.8%; Manufacturing continues to add jobs

The US unemployment rate fell to a two-year low of 8.8 percent in March as the private sector pumped out jobs, official data showed Friday, signaling recovery in the troubled labor market. It was the lowest jobless rate since March 2009 thanks to stronger private job creation, the Labor Department reported. The economy added 216,000 nonfarm jobs last month, the Labor Department said, an increase of 11 percent from February and the sixth consecutive month of overall job gains. Manufacturing, the key driver of the recovery, continued to add jobs but at a sharply slower pace in March -- 17,000 -- under pressure from a loss of 1,000 jobs in the embattled construction sector. A separate ISM manufacturing index released Friday showed the sector remained robust in March after hitting a nearly seven-year high in February. "The March employment report was probably the best in four years, i.e. when first signs of the impending recession emerged," said Harm Bandholz, chief US economist at UniCredit Research.

(AFP|Yahoo.com |April 1, 2011)
news.yahoo.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In March 2011, average hourly earnings in manufacturing were $18.92, up 0.05 percent from February 2011’s $18.91 (preliminary), and up 2.33 percent from March 2010’s $18.49.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0436,” released April 1, 2011; next release is May 6, 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 (revised) was up 3.1 percent in total manufacturing, up 3.0 percent in durable manufacturing and up 2.9 percent in nondurable manufacturing.

  • In the fourth-quarter of 2010, hourly compensation of all manufacturing workers increased 1.5 percent, compared to a 5.2 percent increase during the fourth-quarter of 2009. Real hourly compensation in the total manufacturing sector increased 0.3 percent in the fourth-quarter of 2010, compared to 3.6 percent increase in the fourth-quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth Quarter and Annual Averages 2010, Revised,” USDL 11-0270, released March 3, 2011; next release is May 5, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits updated

  • In the fourth quarter of 2010, manufacturing profits decreased 10.3 percent, or $27.7 billion, to $241.5 billion from $269.2 billion in the third quarter. Compared with fourth quarter profits of 2009, manufacturing profits were up $70.6 billion in the fourth quarter of 2010.

  • Fourth quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) decreased $147.9 billion from the third quarter of 2010 to $885.4 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 11-13,” released March 25, 2011; next release is May 26, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp4q10_3rd.pdf

       

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Manufacturing Employment updated

  • In March 2011, manufacturing employment went up, with an increase of 17,000 jobs.

  • In March, durable goods manufacturing gained 17,000 jobs with increase in fabricated metal products (8,200), machinery (4,900), transportation equipment (6,100), primary metals (1,100), nonmetallic mineral products (500), wood products (400), and computer and electronic products (300). Meanwhile, job losses occurred in electrical equipment and appliances (-1,900). miscellaneous manufacturing (-1,400), and furniture and related products (-300).

  • In March, the employment level in nondurable goods manufacturing sector remained unchanged. However, job gains occurred in plastics and rubber products (1,300), paper and paper products (1,000), printing and related support activities (800), petroleum and coal products (800), chemicals (800), leather and allied products (300), and textile mills (100). Meanwhile, job losses occurred in food manufacturing (-2,800), beverages and tobacco products (-1,400), apparel (-700), and textile product mills (-100).

  • 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-11-0436,” released April 1, 2011; next release is May 6, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In February 2011, manufacturing production was up 0.4 percent from previous month and was 6.9 percent above its year-earlier level.

  • Production of durable goods was up 0.9 percent from the previous month. The durable industries that registered increases in output included motor vehicles and parts (4.2 percent), wood products (2.3 percent), furniture and related products (1.4 percent), miscellaneous (1.4 percent), nonmetallic mineral products (1.1 percent), computer and electronic products (1.0 percent), electrical equip., appliances, and components (1.0 percent), aerospace and miscellaneous transportation equipment (0.2 percent), and fabricated metal products (0.2 percent). The durable industries that registered decreases in output included primary metal (-1.1 percent). There was no change in machinery production.

  • There was no change in production of nondurable goods in February. The nondurable manufacturing industries that registered increases in output included textile and product mills (2.5 percent), apparel and leather (0.9 percent), printing and support (0.7 percent), paper (0.7 percent), and petroleum and coal products (0.3 percent). The nondurable industries that registered decreases in output included plastics and rubber products (-0.5 percent), food, beverage, and tobacco products (-0.3 percent), and chemical (-0.2 percent).

  • Other manufacturing industries (non-NAICS) was down 0.8 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released March 17, 2011; next release is April 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In February 2011, manufacturing industries (NAICS based) operated at 74.7 percent of capacity, 4.2 percentage points below their 1972-2009 average of 78.9 percent and 0.3 percent points higher than their revised capacity utilization level in January 2011.

  • In February 2011, durable manufacturing, capacity utilization operated at 73.5 percent capacity, up 0.7 points from previous month (revised). Increased capacity utilization was registered in motor vehicles and parts (2.5 points), wood products (1.7 points), furniture and related products (1.1 points), miscellaneous (0.8 points), electrical equip., appliances, and components (0.8 points), nonmetallic mineral products (0.8 points), computer and electronic products (0.3 points), fabricated metal products (0.3 points), machinery (0.1 points), and aerospace and miscellaneous transportation equipment (0.1 points). Decreased capacity utilization was registered in primary metal (-0.9 points).

  • In February 2011, non-durable manufacturing, capacity utilization decreased 0.1 percentage points in from previous month (revised) to 76.2 percent. Increased capacity utilization was registered in textile and product mills (1.8 points), apparel and leather (0.8 points), paper (0.6 points), printing and support (0.4 points), and petroleum and coal products (0.3 points). Decreased capacity utilization was registered in food, beverage, and tobacco products (-0.4 points), plastics and rubber products (-0.3 points), and chemical (-0.2 points).

  • The index for other manufacturing industries (non-NAICS) decreased 0.6 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released March 17, 2011; next release is April 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity (revised) rose 5.9 percent in the fourth-quarter of 2010, as output increased 4.4 percent and hours decreased 1.4 percent. Productivity was up 4.8 percent in the durable goods industries and up 8.0 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 2.7 percent in the fourth-quarter of 2010 and fell 2.7 percent over the last four quarters.

  • In durable goods industries, productivity (revised) was up 4.8 percent from previous quarter, as output increased 4.7 percent, while hours worked remained the same.

  • In nondurable goods industries, productivity (revised) was up 8.0 percent from previous quarter, as output increased 4.0 percent, while hours worked decreased 3.7 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth-Quarter and Annual Averages 2010, Revised,” USDL 11-0270, released March 3, 2011; next release is May 5, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in January were 8.2 percent lower than the previous month. Imports were down 3.2 percent.

  • Year to date January 2011, U.S. manufactured goods exports accounted for 76.0 percent of all U.S. exports of goods, compared with 79.9 percent a year ago.

  • The year to date January 2011 trade deficit in manufactured goods of $36.9 billion was $11.4 billion more when compared with $25.5 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB11-41, BEA11-09, FT-900(11-01),” released March 10, 2011; next release is April 12, 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 February, up four consecutive months, increased $0.6 billion or 0.3 percent to $203.0 billion, unchanged from the previously published increase. This followed a 0.2 percent January increase.

  • In February, shipments increased in machinery (2.3 percent), transportation equipment (1.4 percent), primary metals (1.3 percent), and electrical equipment, appliances, and components (0.3 percent). Shipments decreased in computers and electronic products (-2.2 percent), nonmetallic mineral products (-1.3 percent), wood products (-0.7 percent).miscellaneous durable goods (-0.7 percent), and furniture and related products (-0.1 percent). There was no change in fabricated metal products.

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-02, CB11-57),” March 31, 2011; next release is April 27, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In February 2011, 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 3.3 percent from previous month.

  • A seasonally adjusted increase of price from January to February was registered in home heating oil and distillates (14.6 percent), no. 2 diesel fuel (12.6 percent), gasoline price (3.7 percent), residential gas (3.2 percent), liquefied petroleum gas (3.1 percent), and residential electric power (1.3 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0349,” released March 16, 2011; next release is April 14, 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 March for the 20th consecutive month, and the overall economy grew for the 22nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its rapid growth in March as the PMI registered 61.2 percent, a decrease of 0.2 percentage point when compared to February's reading of 61.4 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 March were: Supplier Deliveries increased 3.7 points to 63.1, and Production increased 2.7 points to 69.0. Meanwhile, New Orders decreased 4.7 points to 63.3, Employment decreased 1.5 points to 63.0, and Inventories decreased 1.4 points to 47.4.

    U.S. Industries Reporting Growth in March 2011

    • Apparel, Leather & Allied Products
    • Transportation Equipment
    • Fabricated Metal Products
    • Machinery
    • Textile Mills
    • Computer & Electronic Products
    • Furniture & Related Products
    • Electrical Equipment, Appliances & Components
    • Food, Beverage & Tobacco Products
    • Paper Products
    • Petroleum & Coal Products
    • Chemical Products
    • Plastics & Rubber Products
    • Miscellaneous Manufacturing
    • Printing & Related Support Activities

    (Institute for Supply Management, data released April 1, 2011; next release is May 2, 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