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Manufacturing Biweekly Update

May 11, 2012 [past updates]


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


Biweekly Notes

Manufacturers search for workers to sustain revival

North Brunswick-based manufacturer XPAK USA has developed machinery that can, among other things, help PepsiCo robotically bundle different flavors of Gatorade into one package. The company is taking off; sales in the first quarter are 10 times higher than they were in all of 2007. “It seems like we are growing, it seems like the economy is coming along, which makes us very happy," owner Tami Minond said. "But it seems like a machinist is a rare bird in New Jersey." Manufacturers "are coming back," said Meredith Aronson, director of the New Jersey Advanced Manufacturing Talent Network. "The companies I talk to are scared. Their orders are increasing, but they simply can't find the workers." Manufacturers have been a bright spot in the nation's slow economic recovery by adding jobs, from February 2010 to February 2012, at a faster pace than the rest of the economy, according to the U.S. Labor Department. As the industry sees growth, policymakers and educators are scrambling to train workers to fill a growing number of manufacturing jobs. Companies such as Advanced Technology Services, headquartered in Peoria, Ill., are benefiting from the rush. In the last year alone, the company has hired more than 1,000 workers, many of them military veterans, according to Jim Hefti, vice president of human resources. He said the company sees the most need in states such as Illinois, Mississippi, South Carolina, Georgia and other parts of the Southeast. In Georgia, home to aerospace giants including Gulfstream and Lockheed Martin, the manufacturing sector grew 6.4% from 2009 to 2010. From February 2011 to February 2012, South Carolina saw an increase of 28,000 jobs — about 9,500 of them in manufacturing. The state is home to Boeing, BMW and Michelin plants.
(USA Today |May 7, 2012)
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U.S. manufacturing grows at fastest pace in 10 months

U.S. manufacturing grew last month at the fastest pace in 10 months. New orders, production and a measure of hiring all rose. The strength at U.S. factories suggests the economy is healthier than recent data had indicated. The Institute for Supply Management, a trade group of purchasing managers, said Tuesday that its index of manufacturing activity reached 54.8 in April. That's the highest level since June and up from 53.4 the previous month. Readings above 50 indicate expansion. The report, which exceeded analysts' expectations, led investors to shift money out of bonds and into stocks. The flurry of stock buying put the Dow Jones industrial average on track for its highest close in more than four years. A measure of employment in the ISM's survey rose to a 10-month high. This showed that factories are still hiring at a solid pace. A gauge of new orders jumped to its highest level in a year. That could signal faster production in the coming months. Export orders also rose, which could offset worries that weaker economies in Europe and China could drag on U.S. exports. A separate report showed that construction spending eked out a gain in March after declining the two previous months. The Commerce Department said construction spending edged up 0.1 percent.
(Associated Press |May 1, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates UPDATED

  • In April 2012, average hourly earnings in manufacturing were $19.15 (preliminary), up 0.47 percent from previous month, and up 1.32 percent from April 2011’s $18.90.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-0816,” released May 4, 2012; next release is June 1, 2012)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) UPDATED

  • In the first-quarter of 2012, hourly compensation from previous quarter, annual rate (preliminary) was up (+1.5 percent) in total manufacturing, up (+0.7 percent) in durable manufacturing and up (+2.8 percent) in nondurable manufacturing.

  • In the first-quarter of 2012, hourly compensation of all manufacturing workers increased (+1.1 percent), compared to a (+2.8 percent) increase during the first-quarter of 2011. Real hourly compensation in the total manufacturing sector decreased (-1.7 percent) in the first-quarter of 2012, compared to (+0.6 percent) increase in the first-quarter of 2011.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2012, Preliminary” USDL 12-0815, released May 3, 2012; next release is June 6, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the fourth quarter of 2011, manufacturing profits increased 4.10 percent, or $11.0 billion, to $279.2 billion from $268.2 billion in the first quarter. Compared with fourth quarter profits of 2010, manufacturing profits were up $91.5 billion in the fourth quarter of 2011

  • Fourth quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $30.1 billion from the third quarter of 2011 to $998.0 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 12-11,” released March 29, 2012; next release is May 31, 2012)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp3q11_3rd.pdf

       

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Manufacturing Employment UPDATED

  • In April 2012, manufacturing employment went up, with an increase of 16,000 jobs.

  • In April, durable goods manufacturing gained 15,000 jobs with increases in fabricated metal products (+5,700), machinery (+4,900), furniture and related products (+2,500), transportation equipment (+2,300), miscellaneous manufacturing (+1,300), and primary metals (+300). However, job loss occurred in wood products (-1,300), nonmetallic mineral products (-300), computer and electronic products (-100). There was no change of employment in electrical equipment and appliances.

  • In April, nondurable goods manufacturing gained 1,000 jobs with increases in food manufacturing (+1,700), beverages and tobacco products (+700), apparel (+700), petroleum and coal products (+500), printing and related support activities (+200), and leather and allied products (+100). However, job losses occurred in paper and paper products (-1,000), plastics and rubber products (-900), chemicals (-800), and textile mills (-300). There was no change of employment in textile product mills (0).

  • 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 12-0816,” released May 4, 2012; next release is June 1, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In March 2012, manufacturing production was down (-0.2 percent) from previous month and was up (+4.8 percent) above its year-earlier level.

  • Production of durable goods was down (-0.2 percent) from the previous month. The durable industries that registered increases in output included motor vehicles and parts (0.6 percent), machinery (0.5 percent), miscellaneous (0.4 percent), and wood products (0.3 percent). The durable industries that registered decreases in output included nonmetallic mineral products (-2.4 percent), primary metals (-1.8 percent), furniture and related products (-1.7 percent), electrical equip., appliances, and components (-1.2 percent), aerospace and miscellaneous transportation equipment (-0.9 percent), and fabricated metal products (-0.1 percent). There was no change in output for computer and electronic products.

  • Production of nondurable goods was down (-0.2 percent) from the previous month. The nondurable manufacturing industries that registered increases in output included chemicals (+0.3 percent), and textile and product mills (+0.2 percent). The nondurable industries that registered decreases in output included printing and support (-2.2 percent), apparel and leather (-1.6 percent), petroleum and coal products (-0.9 percent), paper (-0.5 percent), plastics and rubber products (-0.3 percent), and food, beverage and tobacco products (-0.2 percent).

  • Other manufacturing (non-NAICS) was up (0.1 percent).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released April 17, 2012; next release is May 16, 2012)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In March 2012, manufacturing industries (NAICS based) operated at 78.3 percent of capacity, (-0.3 percent) below the revised capacity utilization level from previous month, and down (-0.4 percentage) points below their 1972-2011 average of 78.7 percent.

  • In March 2012, durable manufacturing, capacity utilization operated at 77.5 percent capacity, down (-0.3 points) from previous month. Decreased capacity utilization was registered in primary metals (-1.3 points), nonmetallic mineral products (-1.3 points), furniture and related products (-1.1 points), electrical equip., appliances, and components (-0.9 points), aerospace and miscellaneous transportation equipment (-0.8 points), computer and electronic products (-0.5 points), and fabricated metal products (-0.1 points). Increased capacity utilization was registered in wood products (+0.4 points), motor vehicles and parts (+0.4 points), machinery (+0.3 points), and miscellaneous (+0.1 points).

  • In March 2012, non-durable manufacturing, capacity utilization operated 79.3 percent capacity, down 0.2 percent from the previous month. Decreased capacity utilization was registered in printing and support (-1.3 points), apparel and leather (-1.0 points), petroleum and coal products (-0.8 points), plastics and rubber products (-0.3 points), paper (-0.3 points), and food, beverage, and tobacco products (-0.2 points). Increased capacity utilization was registered in textile and product mills (+0.2 points), and chemicals (+0.2 points).

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

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released April 17, 2012; next release is May 16, 2012)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity UPDATED

  • Manufacturing sector productivity was up (+5.9 percent) in the first-quarter of 2012, as output increased (+10.8 percent) and hours increased (+4.6 percent). Productivity was up (+10.2 percent) in the durable goods industries and up (+1.4 percent) in the nondurable goods industries. Unit labor costs in manufacturing decreased (-4.2 percent) in the first-quarter of 2012, and decreased (-1.3 percent) over the last four quarters.

  • In durable goods industries, productivity was up (+10.2 percent) from previous quarter, as output increased (15.6 percent), while hours worked increased (4.9 percent).

  • In nondurable goods industries, productivity was up (+1.4 percent) from previous quarter, as output increased (+5.7 percent), and hours worked increased (+4.2 percent).

    (BLS/DOL Productivity data from “Productivity and Costs, First-Quarter 2012, Preliminary,” USDL 12-0815, released May 3, 2012; next release is June 6, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade UPDATED

  • Manufactured goods exports in March 2012 were 14.06 percent higher than the previous month. Imports were 13.74 percent higher.

  • Year-to-date March 2012, U.S. manufactured goods exports accounted for 86.5 percent of all U.S. exports of goods, compared with 84.3 percent a year ago.

  • The year-to-date March 2012 trade deficit in manufactured goods of $100.7 billion was $0.6 billion more when compared with $100.1 billion a year ago.

    (USA Trade Online, U.S. Census Bureau, released May 10, 2012; Next release is June 8, 2012)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments UPDATED

  • Shipments of manufactured durable goods in March, up three of the last four months, increased $2.0 billion or 0.9 percent to $208.8 billion, revised from the previously published 1.0 percent increase. This followed a 0.3 percent February decrease.

  • In March, shipments increased in machinery (+6.5 percent), electrical equipment, appliances, and components (+2.3 percent), furniture and related products (+1.7 percent), wood products (+1.6 percent), miscellaneous durable goods (+1.5 percent), and transportation equipment (+1.2 percent). However, shipments decreased in computers and electronic products (-2.1 percent), primary metals (-2.0 percent), and nonmetallic mineral products (-0.9 percent). There was no change of shipment in fabricated metal products.

    (Census Bureau/DOC data from “Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(12)-3, CB12-70),” May 2, 2012; next release is June 4, 2012)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices UPDATED

  • In April 2012, 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 down (-1.4 percent) from previous month.

  • A seasonally adjusted decrease in price from March to April was registered in liquefied petroleum gas (-7.2 percent), no. 2 diesel fuel (-4.2 percent), home heating oil and distillates (-3.4 percent), residential gas (-3.1 percent), and gasoline (-1.7 percent). An increase in price was registered residential electric power (+0.3 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 12-0895,” released May 11, 2012; next release is June 13, 2012)
    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 April for the 33rd consecutive month, and the overall economy grew for the 35th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in April as the PMI registered 54.8 percent, an increase of 1.4 percentage points when compared to March's reading of 53.4 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 April were Production, +2.7 points increase to 61.0; Employment, +1.2 points increase to 57.3; Inventories, -1.5 points decrease to 48.5; New Orders +3.7 points increase to 58.2; Supplier Deliveries, +1.2 points increase to 49.2.

    U.S. Industries Reporting Growth in APRIL 2012

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

    (Institute for Supply Management, data released May 1, 2012; next release is June 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