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Manufacturing Biweekly Update

June 10, 2011 [past updates]


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


Biweekly Notes

U.S. trade deficit narrows sharply

Fewer oil imports and strong demand for American goods and services drove the U.S. trade deficit down nearly 7 percent in April, providing a break from a recent string of economic news that had called into question the pace of the nation’s fragile economic recovery. The $43.7 billion shortfall is down from $46.8 billion in March, according to figures released Thursday by the Department of Commerce. Imports stood at $219.2 billion while exports totaled $175.6 billion, according to the data. The gains broke a string of losses precipitated by weak manufacturing and unemployment data released last week.
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(Washington Post| June 9, 2011)

Manufacturers building a bigger presence in the U.S.

Nearly written off after decades of stagnation, job losses and overseas outsourcing, the "Made in the U.S.A." label is poised for a comeback. A retooled domestic workforce, paired with rising wages abroad, could lead to a renaissance in U.S. manufacturing within five years, according to a recent study by the Boston Consulting Group. A number of companies are ahead of the curve, including California-based toymaker Wham-O, which last year returned 50 percent of its Frisbee and Hula-Hoop production from China and Mexico to the U.S. Downers Grove-based Dover Corp., a publicly traded industrial conglomerate with $7.1 billion in annual revenue, maintains a similar manufacturing mix across its diverse product line. About half of Dover's products are made in the U.S., a percentage that used to be much higher. Working with 25 major manufacturers in 40 states, Mexico and Britain, Advanced Technology Services is heavily invested in finding and training its 3,000 or so employees. Launched as a subsidiary of Caterpillar Inc. in 1985, the now private company has grown at a 20 percent annual clip since its inception, making skilled labor its most valuable commodity.
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(Chicago Tribune |June 4, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In May 2011, average hourly earnings in manufacturing were $18.93 (preliminary), up 0.11 percent from previous month, and up 1.83 percent from May 2010’s $18.59.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0809,” released June 3 2011; next release is July 8, 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 (revised) was up 2.8 percent in total manufacturing, up 2.9 percent in durable manufacturing and up 2.1 percent in nondurable manufacturing.

  • In the first-quarter of 2011, hourly compensation of all manufacturing workers increased 3.4 percent (revised), compared to a 2.8 percent increase during the first-quarter of 2010. Real hourly compensation in the total manufacturing sector increased 1.1 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, Revised,” USDL 11-0808, released June 2, 2011; next release is August 9, 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. (NOTE: The manufacturing profits for first quarter 2011 will be updated in the next release)

  • First quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $126.9 billion from the fourth quarter of 2010 to $1012.3 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 11-22,” released May 26, 2011; next release is June 24, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp4q10_3rd.pdf

       

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Manufacturing Employment updated

  • In May 2011, manufacturing employment went down, with a decrease of 5,000 jobs.

  • In May, durable goods manufacturing gained 8,000 jobs with increase in fabricated metal products (6,500), machinery (5,500), primary metals (3,100), furniture and related products (2,200), nonmetallic mineral products (1,100), and miscellaneous manufacturing (700). Meanwhile, job losses occurred in transportation equipment (-8,800), wood products (-2,200), and computer and electronic products (-400). There was no change of employment in electrical equipment and appliances.

  • In May, the employment level in nondurable goods manufacturing sector lost 13,000 jobs with decreases in food manufacturing (-7,000), printing and related support activities (-4,300), paper and paper products (-2,500), chemicals (-800), petroleum and coal products (-600), textile product mills (-300), and leather and allied products (-300). Meanwhile, job gains occurred in beverages and tobacco products (1,300), plastics and rubber products (800), apparel (300), and textile 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-11-0809,” released June 3, 2011; next release is July 8, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In April 2011, manufacturing production was down 0.4 percent from previous month and was 4.6 percent above its year-earlier level.

  • Production of durable goods was down 1.0 percent from the previous month. The durable industries that registered increases in output included aerospace and miscellaneous transportation equipment (1.3 percent), computer and electronic products (1.1 percent), nonmetallic mineral products (0.5 percent), fabricated metal products (0.4 percent), miscellaneous (0.3 percent), and machinery production (0.2 percent). The durable industries that registered decreases in output included motor vehicles and parts (-8.9 percent), electrical equip., appliances, and components (-2.3 percent), and primary metal (-1.8 percent), furniture and related products (-1.1 percent), and wood products (-0.4 percent).

  • Production of nondurable goods was up 0.1 percent from the previous month. The nondurable manufacturing industries that registered increases in output included textile and product mills (2.4 percent), printing and support (1.3 percent), apparel and leather (0.9 percent), chemicals (0.6 percent), plastics and rubber products (0.4 percent), and food, beverage, and tobacco products (0.3 percent). The nondurable industries that registered decreases in output included petroleum and coal products (-2.9 percent), and paper (-0.6 percent).

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

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

       

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Manufacturing Capacity Utilization

  • In April 2011, manufacturing industries (NAICS based) operated at 74.9 percent of capacity, 3.9 percentage points below their 1972-2010 average of 78.8 percent and 0.4 percent points lower than their revised capacity utilization level in March 2011.

  • In April 2011, durable manufacturing, capacity utilization operated at 72.6 percent capacity, down 0.8 points from previous month. Increased capacity utilization was registered in aerospace and miscellaneous transportation equipment (0.9 points), fabricated metal products (0.5 points), nonmetallic mineral products (0.4 points), computer and electronic products (0.3 points), machinery (0.1 points), and miscellaneous (0.1 points). Decreased capacity utilization was registered in motor vehicles and parts (-6.1 points), electrical equip., appliances, and components (-1.7 points), primary metals (-1.4 points), furniture and related products (-0.7 points), and wood products (-0.1 points).

  • In April 2011, non-durable manufacturing, capacity utilization remained the same at 77.4 percent. Increased capacity utilization was registered in textile and product mills (1.7 points), printing and support (0.8 points), apparel and leather (0.7 points), chemicals (0.5 points), plastics and rubber products (0.5 points), and food, beverage, and tobacco products (0.1 points). Decreased capacity utilization was registered in petroleum and coal products (-2.5 points), and paper (-0.4 points).

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

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

       

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Manufacturing Productivity updated

  • Manufacturing sector productivity (revised) rose 4.2 percent in the first-quarter of 2011, as output increased 7.7 percent and hours increased 3.3 percent. Productivity was up 7.5 percent in the durable goods industries and up 2.6 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 1.4 percent in the first-quarter of 2011 and fell 0.7 percent over the last four quarters.

  • In durable goods industries, productivity (revised) was up 7.5 percent from previous quarter, as output increased 14.0 percent, and hours worked increased 6.1 percent.

  • In nondurable goods industries, productivity (revised) was up 2.6 percent from previous quarter, as output increased 1.5 percent, while hours worked decreased 1.1 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, First-Quarter 2011, Revised,” USDL 11-0808, released June 2, 2011; next release is August 9, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade updated

  • Manufactured goods exports in April were 5.4 percent lower than the previous month. Imports were down 4.0 percent.

  • Year to date April 2011, U.S. manufactured goods exports accounted for 84.5 percent of all U.S. exports of goods, compared with 86.3 percent a year ago.

  • The year to date April 2011 trade deficit in manufactured goods of $133.2 billion was $28.3 billion more when compared with $104.9 billion a year ago.

    (Please note that the manufacturing trade numbers are now defined on a NAICS basis, so they will not be comparable with the prior figures.)

    (USA Trade Online, U.S. Census Bureau, June 9 data release. Next release is July 12, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments updated

  • Shipments of manufactured durable goods in April, down following four consecutive monthly increases, decreased $2.5 billion or 1.3 percent to $194.4 billion, revised from the previously published 1.0 percent decrease. This followed a 3.1 percent March increase.

  • In April, shipments decreased in machinery (-4.3 percent), transportation equipment (-3.3 percent), electrical equipment, appliances, and components (-2.8 percent), furniture and related products (-1.8 percent), nonmetallic mineral products (-1.5 percent), fabricated metal products (-0.9 percent), primary metals (-0.2 percent), miscellaneous durable goods (-0.2 percent), and wood products (-0.1 percent). However, shipment increased in computers and electronic products (3.9 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-04, CB11-96),” June 2, 2011; next release is July 5, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • 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 May for the 22nd consecutive month, and the overall economy grew for the 24th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in May as the PMI registered 53.5 percent, a decrease of 6.9 percentage points when compared to April's reading of 60.4 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 May were: New Orders, 10.7 points decrease to 51.0; Production, 9.8 points decrease to 54.0; Inventories, 4.9 points decrease to 48.7; Supplier Deliveries, 4.5 points decrease to 55.7; and Employment, 4.5 points decrease to 58.2.

    U.S. Industries Reporting Growth in may 2011

    • Nonmetallic Mineral Products
    • Petroleum & Coal Products
    • Machinery
    • Transportation Equipment
    • Computer & Electronic Products
    • Textile Mills
    • Electrical Equipment, Appliances & Components
    • Primary Metals
    • Miscellaneous Manufacturing
    • Paper Products
    • Chemical Products
    • Plastics & Rubber Products
    • Apparel, Leather & Allied Products
    • Fabricated Metal Products

    (Institute for Supply Management, data released June 1, 2011; next release is July 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