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Manufacturing Biweekly Update

August 19, 2011 [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 down up
Exports down up
Goods Shipments up up


Biweekly Notes

US manufacturing index plunges

US manufacturing in the mid-Atlantic states took a sharp hit in August amid wildly volatile US and global financial markets, the central bank said Thursday. The Federal Reserve Bank of Philadelphia said manufacturing activity "dipped significantly," to an index of negative 30.7 in August from a positive 3.2 in July. The Philly Fed index showed sharp declines from July in activity, shipments and new orders. The regional central bank said that its indicator of future activity tumbled to 1.4 from 23.7 in July. The business survey was conducted August 8-16, "overlapping a week of unusually high volatility in both domestic and international financial markets," it said.
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(Yahoo finance |August 18, 2011)

U.S. manufacturing shows a blip of hope

Manufacturers in the U.S. churned out more cars, computers and furniture in July, easing concern that one of the mainstays of the recovery was giving way. The 0.9% increase in production at factories, mines and utilities was almost twice the median forecast of economists surveyed by Bloomberg News and the biggest gain of the year, according to data Tuesday from the Federal Reserve in Washington. Another report showed home builders cut back last month. Part of the jump in manufacturing reflects a rebound from the supply shock caused by the earthquake in Japan, indicating it will be difficult for factories to maintain this pace of output as consumer spending and exports cool. At the same time, companies have kept inventories lean, limiting the need for large-scale cuts that could trigger an economic slump. Manufacturing excluding motor vehicles climbed 0.3% after a 0.2% gain in the prior month.
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(Bloomberg News |Detroit Free Press |August 17, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In July 2011, average hourly earnings in manufacturing were $19.02 (preliminary), up 0.6 percent from previous month, and up 2.3 percent from July 2010’s $18.60.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-1151,” released August 5, 2011; next release is September 2, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) Updated

  • In the second-quarter of 2011, hourly compensation from previous quarter, annual rate (preliminary) was up 2.3 percent in total manufacturing, up 1.6 percent in durable manufacturing and up 3.0 percent in nondurable manufacturing.

  • In the second-quarter of 2011, hourly compensation of all manufacturing workers increased 2.3 percent, compared to a 1.4 percent (revised) increase during the second-quarter of 2010. Real hourly compensation in the total manufacturing sector decreased -1.0 percent in the second-quarter of 2011, compared to -0.4 percent (revised) decrease in the second-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2011, Preliminary,” USDL 11-1185, released August 9, 2011; next release is September 1, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the firsts quarter of 2011, manufacturing profits increased 15.9 percent, or $29.9 billion, to $217.6 billion from $187.7 billion in the fourth quarter. Compared with first quarter profits of 2010, manufacturing profits were up $1.4 billion in the first quarter of 2011.

  • First quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $100.3 billion (revised) from the fourth quarter of 2010 to $858.8 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-38,” released July 29, 2011; next release is July 29, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp2q11_adv.pdf

       

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Manufacturing Employment

  • In July 2011, manufacturing employment went up, with an increase of 24,000 jobs.

  • In July, durable goods manufacturing gained 23,000 jobs with increase in transportation equipment (14,400), fabricated metal products (4,500), furniture and related products (2,800), computer and electronic products (2,500), machinery (1,500), primary metals (1,200), and electrical equipment and appliances (700). However, job losses occurred in wood products (-4,100), miscellaneous manufacturing (-400), and nonmetallic mineral products (-300).

  • In July, nondurable goods manufacturing sector gained 1,000 jobs with increases in plastics and rubber products (2,100), food manufacturing (1,700), chemicals (1,300), textile mills (800), and paper and paper products (600). Meanwhile, job losses occurred in apparel (-2,000), printing and related support activities (-1,600), beverages and tobacco products (-700), textile product mills (-400), petroleum and coal products (-200), and leather and allied products (-100).

  • The manufacturing employment of 11.7 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-11-1151,” released August 5, 2011; next release is September 2, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production Updated

  • In July 2011, manufacturing production was up 0.6 percent from previous month and was 3.8 percent above its year-earlier level.

  • Production of durable goods was up 1.0 percent from previous month. The durable industries that registered increases in output included motor vehicles and parts (5.2 percent), primary metal (1.7 percent), aerospace and miscellaneous transportation equipment (1.3 percent), furniture and related products (0.7 percent), computer and electronic products (0.5 percent), nonmetallic mineral products (0.5 percent), fabricated metal products (0.4 percent), and wood products (0.2 percent). The durable industries that registered decreases in output included electrical equip., appliances, and components (-2.3 percent), miscellaneous (-0.2 percent). Meanwhile, output of machinery remained unchanged.

  • Production of nondurable goods was up 0.3 percent from the previous month. The nondurable manufacturing industries that registered increases in output included plastics and rubber products (1.2 percent), printing and support (1.0 percent), food, beverage, and tobacco products (0.6 percent), petroleum and coal products (0.2 percent), textile and product mills (0.2 percent), and paper (0.2 percent). The nondurable industries that registered decreases in output included apparel and leather (-1.8 percent), and chemicals (-0.3 percent).

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

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 16, 2011; next release is September 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization Updated

  • In July 2011, manufacturing industries (NAICS based) operated at 75.5 percent of capacity, 3.3 percentage points below their 1972-2010 average of 78.8 percent and 0.4 percent above their revised capacity utilization level in June 2011.

  • In July 2011, durable manufacturing, capacity utilization operated at 73.7 percent capacity, up 0.6 points from previous month. Increased capacity utilization was registered in motor vehicles and parts (3.0 points), primary metals (1.3 points), aerospace and miscellaneous transportation equipment (0.9 points), furniture and related products (0.6 points), fabricated metal products (0.4 points), nonmetallic mineral products (0.4 points), and wood products (0.3 points). Decreased capacity utilization was registered in electrical equip., appliances, and components (-1.6 points), miscellaneous (-0.4 points), and computer and electronic products (-0.3 points). Meanwhile, capacity utilization was unchanged for machinery.

  • In July 2011, non-durable manufacturing, capacity utilization operated at 77.5 percent, up 0.2 percent points from previous month. Increased capacity utilization was registered in plastics and rubber products (1.0 points), printing and support (0.7 points), textile and product mills (0.3 points), food, beverage, and tobacco products (0.3 points), paper (0.2 points), and petroleum and coal products (0.1 points). Decreased capacity utilization was registered in chemicals (-0.3 points), and apparel and leather (-1.2 points).

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

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 16, 2011; next release is September 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity Updated

  • Manufacturing sector productivity fell -2.0 percent in the second-quarter of 2011, as output increased 0.6 percent and hours increased 2.6 percent. Productivity was down -3.5 percent in the durable goods industries and up 1.2 percent in the nondurable goods industries. Unit labor costs in manufacturing increased 4.4 percent in the second-quarter of 2011 and remained the same over the last four quarters.

  • In durable goods industries, productivity was down 3.5 percent from previous quarter, as output increased 1.4 percent, and hours worked increased 5.1 percent.

  • In nondurable goods industries, productivity was up 1.2 percent from previous quarter, as output decreased -0.2 percent, while hours worked decreased -1.4 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Second-Quarter 2011, Preliminary,” USDL 11-1185, released August 9, 2011; next release is September 1, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade Updated

  • Manufactured goods exports in June were 0.02 percent lower than the previous month. Imports were up 1.41 percent.

  • Year to date June 2011, U.S. manufactured goods exports accounted for 85.0 percent of all U.S. exports of goods, compared with 86.6 percent a year ago.

  • The year to date June 2011 trade deficit in manufactured goods of $213.5 billion was $37.8 billion more when compared with $175.7 billion a year ago.

    (USA Trade Online, U.S. Census Bureau August 11 data release. Next release is September 8, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in June, up six of the last seven months, increased $1.0 billion or 0.5 percent to $196.1 billion, unchanged from the previously published increase. This followed a 0.5 percent May increase.

  • In June, shipments increased in machinery (2.8 percent), primary metals (2.6 percent), fabricated metal products (0.9 percent), nonmetallic mineral products (0.6 percent), miscellaneous durable goods (0.6 percent), and electrical equipment, appliances, and components (0.3 percent). However, shipments decreased in computers and electronic products (-1.8 percent), wood products (-0.7 percent), furniture and related products (-0.6 percent), and transportation equipment (-0.4 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-06, CB11-131),” August 3, 2011; next release is August 31, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices Updated

  • In July 2011, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.4 percent compared to previous month.

  • The index for finished energy goods was down 0.6 percent from previous month.

  • A seasonally adjusted increase of price from June to July was registered in liquefied petroleum gas (2.5 percent), and residential electric power (1.2 percent). Decrease of price from June to July was registered in gasoline price (-2.8 percent), no. 2 diesel fuel (-2.1 percent), home heating oil and distillates (-1.5 percent), and residential gas (-0.9 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-1228,” released August 17, 2011; next release is September 14, 2011)
    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 July for the 24th consecutive month, and the overall economy grew for the 26th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in July as the PMI registered 50.9 percent, a decrease of 4.4 percentage points when compared to June's reading of 55.3 percent. The PMI registered the lowest reading since July 2009, when it registered 49 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 July were: Employment, 6.4 points decrease to 53.5; Supplier Deliveries, 5.9 points decrease to 50.4; Inventories, 4.8 points decrease to 49.3; New Orders, 2.4 points decrease to 49.2; and Production, 2.2 points decrease to 52.3.

    U.S. Industries Reporting Growth in July 2011

    • Paper Products
    • Furniture & Related Products
    • Computer & Electronic Products
    • Transportation Equipment
    • Wood Products
    • Petroleum & Coal Products
    • Printing & Related Support Activities
    • Primary Metals
    • Fabricated Metal Products
    • Nonmetallic Mineral Products

    (Institute for Supply Management, data released August 1, 2011; next release is September 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