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Manufacturing Biweekly Update

May 25, 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 up up
Exports up up
Goods Shipments up up


Biweekly Notes

Cities where jobs in manufacturing pay the most

Not all manufacturing jobs are created equal -- and certainly not manufacturing pay. According to a new study released by Brookings’ Metropolitan Policy Program, manufacturing wages differ widely between large cities. Workers in McAllen, Texas, earn an average of roughly $35,000 per year, while those in Silicon Valley earn an average of more than four times that. 24/7 Wall St. reviewed the 10 cities with the highest-paid manufacturing jobs. The Brookings report performed a detailed study of the composition and pay of manufacturing in the nation’s 100 largest metropolitan regions. It appears that the biggest determinant of whether manufacturing jobs are high- or low-paying is the type of industry or industries operating in the region. High-tech manufacturing positions, which include the production of computers and electronics, pharmaceuticals and medicines, and aerospace products and parts, pay the highest salaries. These three categories have the first, second and fourth highest average wages of all types of manufacturing.
(MSNBC| May 18, 2012)
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Seattle Is Leading An American Manufacturing Revival

In this still tepid recovery, the biggest feel-good story has been the resurgence of American manufacturing. As industrial production has fallen in Europe and growth has slowed in China, U.S. factories have continued an expansion that has stretched on for over 33 months. In April, manufacturing growth was the strongest in 10 months. In an era of excitement over the Internet, it is often forgotten that a majority of the country’s scientists and engineers work for manufacturers, and that industrial companies account for 68% of business R&D spending, which in turn accounts for about 70% of total R&D spending. Nowhere is this linkage between technology and industry more evident than in the Seattle-Bellevue-Everett area, which ranks first on our list of the metropolitan areas leading the manufacturing revival. Over the past year the region was No. 2 in the nation in manufacturing growth, with employment expanding 7.9%. The aerospace sector, led by Boeing, accounted for roughly half this expansion. Seattle is not alone in creating high-tech-oriented industrial jobs. Over the past two years Salt Lake City, Utah, which ranks third on our list, has seen significant growth in both electronics and aerospace employment, including a new Northrop Grumman facility. Firms connected to the medical device industry such as Biomerics are also expanding in the area. Manufacturing is also rebounding in Austin-Round Rock-San Marcos, Texas, which ranks eighth on our list and No. 1 on our overall list of Best Big Cities For Jobs. Last year industrial employment in the Texas state capital area jumped 5%. Semiconductor firms are a big force, employing over 10,000 workers. Although more known for its high-tech electronics, Austin has also enjoyed an expansion in automobile-related employment as well as medical devices.
(Forbes |May 24, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • 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)

  • 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

  • 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 UPDATED

  • In April 2012, manufacturing production was up (+0.6 percent) from previous month and was up (+5.8 percent) above its year-earlier level.

  • Production of durable goods was up (+1.3 percent) from the previous month. The durable industries that registered increases in output included motor vehicles and parts (+3.9 percent), furniture and related products (+2.4 percent), computer and electronic products (+1.6 percent), miscellaneous (+1.5 percent), aerospace and miscellaneous transportation equipment (+1.1 percent), fabricated metal products (+0.8 percent), electrical equip., appliances, and components (+0.7 percent), nonmetallic mineral products (+0.4 percent), machinery (+0.1 percent), and primary metals (+0.1 percent). The durable industries that registered decreases in output included wood products (-1.4 percent).

  • In April 2012, production of nondurable goods was down (-0.2 percent) from the previous month. The nondurable manufacturing industries that registered increases in output included paper (+0.7 percent), apparel and leather (+0.6 percent), printing and support (+0.6 percent), textile and product mills (+0.5 percent), and chemicals (+0.3 percent). The nondurable industries that registered decreases in output included petroleum and coal products (-2.6 percent), plastics and rubber products (-0.4 percent), and food, beverage and tobacco products (-0.2 percent).

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

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

       

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Manufacturing Capacity Utilization UPDATED

  • In April 2012, manufacturing industries (NAICS based) operated at 78.4 percent of capacity, (+0.4 percent) above the capacity utilization level from previous month, and down (-0.3 percentage) points below their 1972-2011 average of 78.7 percent.

  • In April 2012, durable manufacturing, capacity utilization operated at 78.3 percent capacity, up (+0.9 points) from previous month. Increased capacity utilization was registered in motor vehicles and parts (+2.8 points), furniture and related products (+1.8 points), and miscellaneous (+0.9 points), aerospace and miscellaneous transportation equipment (+0.7 points), computer and electronic products (+0.7 points), electrical equip., appliances, and components (+0.6 points), fabricated metal products (+0.6 points), nonmetallic mineral products (+0.5 points), and primary metals (+0.2 points). Decreased capacity utilization was registered in wood products (-0.8 points), and machinery (-0.2 points).

  • In April 2012, non-durable manufacturing, capacity utilization operated 78.6 percent capacity, down 0.1 points from the previous month. Increased capacity utilization was registered in printing and support (+0.6 points), apparel and leather (+0.6 points), paper (+0.6 points), textile and product mills (+0.4 points), and chemicals (+0.2 points). Decreased capacity utilization was registered in petroleum and coal products (-2.1 points), plastics and rubber products (-0.4 points), and food, beverage, and tobacco products (-0.2 points).

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

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

       

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Manufacturing Productivity

  • 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

  • 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

  • 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

  • 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  

  • 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