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Manufacturing Biweekly Update

May 13, 2011 [past updates]


U.S. Manufacturing Trends Current Period Year-to-Date
Wage Rates No Change 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

Inflation hits 2-1/2 year high, seen peaking

Inflation raced to a 2-1/2 year high in April as food and gasoline prices rose, but there was little sign of a broader pick-up in consumer prices that would trouble the Federal Reserve. While food and fuel pushed up prices last month, the pace of increases slowed considerably from March. That and a strengthening labor market helped to buoy consumer confidence in early May. The Labor Department said on Friday its Consumer Price Index increased 0.4 percent in April from March after rising 0.5 percent in March. The rise, which was in line with economists' expectations, took the year-on-year inflation reading to 3.2 percent, the highest since October 2008. The core CPI, which strips out volatile food and energy costs, rose a mild 0.2 percent from March, and the 12-month increase, at 1.3 percent, was at its highest level since February 2010.

(Reuters| May 13, 2011)
Reuters.com

Manufacturing grew for 21st month in April

Manufacturing activity grew for the 21st straight month in April, fueled by a weak dollar that has made U.S. goods cheaper overseas. But the cost of raw materials rose for the fifth consecutive month, a growing concern for many companies. The Institute for Supply Management, a trade group of purchasing executives, said Monday that its index of manufacturing activity dipped to 60.4 in April. That's down slightly from March and February, the fastest month for expansion in nearly seven years. A reading above 50 signals growth. Since the beginning of the year, manufacturing has grown at the fastest pace in 27 years, said David Resler, an economist at Nomura Securities. The index has topped 60 for four straight months, evidence that manufacturing remains one of the strongest components of the economy. The index bottomed out during the recession at 33.3 in December 2008, the lowest point since June 1980.

(AP|Yahoo.com |May 2, 2011)
news.yahoo.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In April 2011, average hourly earnings in manufacturing were $18.90 (preliminary), no change from previous month, and up 2.11 percent from April 2010’s $18.51.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0622,” released May 6, 2011; next release is June 3, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) updated

  • In the first-quarter of 2011, hourly compensation from previous quarter, annual rate (preliminary) was up 2.6 percent in total manufacturing, up 2.4 percent in durable manufacturing and up 2.2 percent in nondurable manufacturing.

  • In the first-quarter of 2011, hourly compensation of all manufacturing workers increased 3.1 percent, compared to a 2.8 percent increase during the first-quarter of 2010. Real hourly compensation in the total manufacturing sector increased 0.9 percent in the first-quarter of 2011, compared to 0.4 percent increase in the first-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2011, Preliminary,” USDL 11-0621, released May 5, 2011; next release is June 2, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • 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 April 2011, manufacturing employment went up, with an increase of 29,000 jobs.

  • In April, durable goods manufacturing gained 19,000 jobs with increase in machinery (5,200), fabricated metal products (5,100), transportation equipment (4,300), primary metals (4,100), computer and electronic products (4,000), nonmetallic mineral products (700), and electrical equipment and appliances (400). Meanwhile, job losses occurred in wood products (-1,900), miscellaneous manufacturing (-1,600), and furniture and related products (-1,600).

  • In April, the employment level in nondurable goods manufacturing sector gained 10,000 jobs with increase in food manufacturing (7,200), chemicals (2,200), beverages and tobacco products (1,300), textile mills (600), paper and paper products (500), and petroleum and coal products (200). Meanwhile, job losses occurred in plastics and rubber products (-1,100), printing and related support activities (-600), textile product mills (-300), and apparel (-100). Meanwhile, leather and allied products remained unchanged.

  • 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-11-0622,” released May 6, 2011; next release is June 3, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In March 2011, manufacturing production was up 0.7 percent from previous month and was 6.6 percent above its year-earlier level.

  • Production of durable goods was up 1.0 percent from the previous month. The durable industries that registered increases in output included motor vehicles and parts (3.0 percent), nonmetallic mineral products (2.3 percent), aerospace and miscellaneous transportation equipment (1.7 percent), wood products (1.6 percent), fabricated metal products (1.1 percent), electrical equip., appliances, and components (0.8 percent), furniture and related products (0.5 percent), computer and electronic products (0.5 percent), machinery production (0.3 percent), and primary metal (0.1 percent). The durable industries that registered decreases in output included miscellaneous (-1.2 percent).

  • Production of nondurable goods was up 0.5 percent from the previous month. The nondurable manufacturing industries that registered increases in output included paper (1.9 percent), chemicals (1.5 percent), plastics and rubber products (0.2 percent), and petroleum and coal products (0.2 percent). The nondurable industries that registered decreases in output included textile and product mills (-2.6 percent), apparel and leather (-2.2 percent), printing and support (-0.7 percent), and food, beverage, and tobacco products (-0.2 percent).

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

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

       

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Manufacturing Capacity Utilization

  • In March 2011, manufacturing industries (NAICS based) operated at 75.8 percent of capacity, 3.0 percentage points below their 1972-2010 average of 78.8 percent and 0.5 percent points higher than their revised capacity utilization level in February 2011.

  • In March 2011, durable manufacturing, capacity utilization operated at 73.9 percent capacity, up 0.6 points from previous month (revised) to 73.9 percent. Increased capacity utilization was registered in motor vehicles and parts (1.8 points), nonmetallic mineral products (1.3 points), wood products (1.2 points), aerospace and miscellaneous transportation equipment (1.2 points), fabricated metal products (0.9 points), electrical equip., appliances, and components (0.8 points), furniture and related products (0.4 points), machinery (0.3 points). Decreased capacity utilization was registered in miscellaneous (-1.0 points), and computer and electronic products (-0.2 points). There was no change in primary metals.

  • In March 2011, non-durable manufacturing, capacity utilization increased 0.4 percentage points in from previous month (revised) to 77.9 percent. Increased capacity utilization was registered in paper (1.7 points), chemicals (1.1 points), plastics and rubber products (0.4 points), and petroleum and coal products (0.2 points), Decreased capacity utilization was registered in textile and product mills (1.6 points), apparel and leather (-1.5 points), printing and support (-0.4 points), and food, beverage, and tobacco products (-0.2 points).

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

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

       

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Manufacturing Productivity updated

  • Manufacturing sector productivity (preliminary) rose 6.3 percent in the first-quarter of 2011, as output increased 9.7 percent and hours increased 3.3 percent. Productivity was up 9.8 percent in the durable goods industries and up 4.5 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 3.5 percent in the first-quarter of 2011 and fell 1.4 percent over the last four quarters.

  • In durable goods industries, productivity (preliminary) was up 9.8 percent from previous quarter, as output increased 16.4 percent, and hours worked increased 6.1 percent.

  • In nondurable goods industries, productivity (preliminary) was up 4.5 percent from previous quarter, as output increased 3.3 percent, while hours worked decreased 1.2 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, First-Quarter 2011, Preliminary,” USDL 11-0621, released May 5, 2011; next release is June 2, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade updated

  • Manufactured goods exports in March were 21.4 percent higher than the previous month. Imports were up 15.6 percent.

  • Year to date March 2011, U.S. manufactured goods exports accounted for 76.9 percent of all U.S. exports of goods, compared with 80.4 percent a year ago.

  • The year to date March 2011 trade deficit in manufactured goods of $102.7 billion was $25.7 billion more when compared with $76.9 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB11-84, BEA11-22, FT-900(11-03),” released May 11, 2011; next release is June 9, 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 March, up five consecutive months, increased $4.4 billion or 2.1 percent to $208.1 billion, revised from the previously published 1.8 percent increase. This followed a 0.6 percent February increase.

  • In March, shipments increased in machinery (4.3 percent), transportation equipment (3.4 percent), wood products (3.2 percent), primary metals (2.9 percent), furniture and related products (2.4 percent), fabricated metal products (2.0 percent), electrical equipment, appliances, and components (1.1 percent), miscellaneous durable goods (1.1 percent), and nonmetallic mineral products (0.9 percent). However, shipment decreased in computers and electronic products (-1.0 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-03, CB11-80),” May 3, 2011; next release is June 2, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In April 2011, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.3 percent compared to previous month.

  • The index for finished energy goods was up 2.5 percent from previous month.

  • A seasonally adjusted increase of price from March to April was registered in liquefied petroleum gas (4.5 percent), home heating oil and distillates (3.9 percent), gasoline price (3.6 percent), no. 2 diesel fuel (3.5 percent), residential gas (3.5 percent), and residential electric power (0.4 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0680,” released May 12, 2011; next release is June 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 April for the 21st consecutive month, and the overall economy grew for the 23rd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its rapid growth in April as the PMI registered 60.4 percent, a decrease of 0.8 percentage point when compared to March's reading of 61.2 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: Inventories, 6.2 points increase to 53.6; Production, 5.2 points decrease to 63.8; Supplier Deliveries, 2.9 points decrease to 60.2; New Orders, 1.6 points decrease to 61.7; and Employment, 0.3 points decrease to 62.7.

    U.S. Industries Reporting Growth in April 2011

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

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