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Manufacturing Biweekly Update

September 17, 2010 [past updates]


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


Biweekly Notes

NY Fed Manufacturing Growth Slows in September

A gauge of manufacturing in New York State unexpectedly fell to its lowest level in more than a year in September, the New York Federal Reserve said in a report Wednesday. The New York Fed's "Empire State" general business conditions index slipped to 4.14 in September from 7.10 in August. September's reading marked the lowest since July 2009. Economists polled by Reuters had expected a reading of 8.0 for September. Employment gauges showed continued improvement. The index for the number of employees rose to 14.93 in September from 14.29 in August. The average employee workweek index increased to 7.46 from 7.14. The index of business conditions six months ahead fell to 31.34 in September from 35.71 in August. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

(Foxbusiness.com |September 15, 2010)
www.foxbusiness.com

Manufacturing in Philadelphia Area Shrank This Month
Manufacturing in the Philadelphia region unexpectedly contracted in September for a second month as orders and sales declined. The Federal Reserve Bank of Philadelphia’s general economic index rose to minus 0.7 this month from minus 7.7 in August. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. The median estimate of economists surveyed by Bloomberg News projected the gauge would turn positive. Less inventory rebuilding and consumers constrained by unemployment hovering close to 10 percent may slow factories, which led the economy out of the worst recession in seven decades.

(Bloomberg|September 16, 2010)
www.bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In August 2010, average hourly earnings in manufacturing were $18.57 (preliminary), up 0.05 percent from July 2010’s $18.56 (preliminary), and up 1.4 percent from August 2009’s $18.31.
       

(BLS/DOL Employment data from “The Employment Situation, USDL 10-1212,” released September 3, 2010; next release is October 8, 2010)
http://www.bls.gov/news.release/pdf/empsit.pdf

Manufacturing Wage Rates (Quarterly, Yearly)

  • During the second quarter of 2010, hourly compensation from previous quarter, annual rate (revised) was down 2.0 percent in total manufacturing, down 1.9 percent in durable manufacturing and down 2.1 percent in nondurable manufacturing.

  • In the second quarter of 2010, hourly compensation of all manufacturing workers decresed 0.3 percent (revised), compared to a 5.9 percent increase during the second quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 2.1 percent (revised) in the second quarter of 2010, compared to 7.0 percent increase in the second quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2010, Revised,” USDL 10-1211, released September 2, 2010; next release is November 4, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the first quarter of 2010, manufacturing profits increased 46.5 percent, or $79.5 billion, to $250.4 billion from $170.9 billion in the fourth quarter. Compared with first quarter profits of 2009, manufacturing profits were up $109.4 billion in the first quarter of 2010. (NOTE: The manufacturing profits for second quarter 2010 will be updated in the next release.)

  • Second quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 7.0 percent from the first quarter of 2010 to $1054.2 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-41,”released August 27, 2010; next release is September 30, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp2q10_2nd.pdf

       

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Manufacturing Employment

  • In August, 2010, manufacturing employment went down, with a decrease of 27,000 jobs.

  • In August, durable goods manufacturing lost 24,000 jobs, with decreases in transportation equipment (-21,400), wood products (-3,000), fabricated metal products (-1,700), furniture and related products (-1,000), machinery (-900), nonmetallic mineral products (-800), and miscellaneous manufacturing (-300). Job gains occurred in computer and electronic products (2,600), electrical equipment and appliances (900), and primary metals (700).

  • In August, nondurable goods manufacturing lost 3,000 jobs, with decreases in printing and related support activities (-2,700), textile mills (-1,800), food manufacturing (-1,300), petroleum and coal products (-300), textile product mills (-200), and chemicals (-100). Meanwhile, job gains occurred in plastics and rubber products (1,600), leather and allied products (900), apparel (400), beverages and tobacco product (400), and paper and paper products (300).

  • 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-10-1212,” released September 3, 2010; next release is October 8, 2010) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production updated

  • In August 2010, manufacturing production was up 0.2 percent from previous month and was 6.3 percent above its year-earlier level.

  • Production of durable goods was down 0.1 percent from previous month. The durable manufacturing industries that registered increases in output included electrical equip., appliances and components (1.7 percent), wood products (1.2 percent), fabricated metal products (1.2 percent), primary metal (1.0 percent), computer and electronic products (0.7 percent), machinery (0.4 percent), and aerospace and miscellaneous transportation equipment (0.4 percent). The durable industry that registered decreases in output included motor vehicles and parts (-5.0 percent), furniture and related products (-1.8 percent), miscellaneous (-0.7 percent), and nonmetallic mineral products (-0.3 percent).

  • The production of nondurable goods was up 0.5 percent from previous month. The nondurable manufacturing industries that registered increases in output included apparel and leather (1.4 percent), food, beverage, and tobacco products (1.2 percent), printing and support (0.6 percent), chemical (0.6 percent), plastics and rubber products (0.2 percent), and paper (0.1 percent). The nondurable industry that registered decreases in output included petroleum and coal products (-1.7 percent), and textile and product mills (-0.3 percent).

  • The index for other manufacturing industries (non-NAICS) was up 0.9 percent from the previous month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released September 15, 2010; next release is October 18, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In August 2010, manufacturing industries (NAICS based) operated at 72.3 percent of capacity, 6.7 percentage points below their 1972-2009 average of 79.0 percent and 0.1 percent points higher than their revised capacity utilization level in July 2010.

  • In durable manufacturing, capacity utilization operated at 70.3 percent capacity, down 0.1 points from July (revised). Increased capacity utilization was registered in electrical equip., appliances,and components (1.3 points), wood products (1.1 points), fabricated metal products (1.0 points), primary metal (0.5 points), machinery (0.4 points), aerospace and miscellaneous transportation equipment (0.2 points), and computer and electronic products (0.1 points). Decreased capacity utilization was demonstrated in motor vehicles and parts (-3.2 points), furniture and related products (-1.0 points), miscellaneous (-0.7 points), and nonmetallic mineral products (-0.1 points).

  • In non-durable manufacturing, capacity utilization increased 0.4 percentage points in from July (revised) to 74.7 percent. Increased capacity utilization was registered in apparel and leather (1.6 points), food, beverage, and tobacco products (0.9 points), printing and support (0.5 points), chemical (0.5 points), paper (0.2 points), textile and product mills (0.1 points), and plastics and rubber products (0.1 points). Decreased capacity utilization was only registered in petroleum and coal products (-1.4 points).

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

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released September 15, 2010; next release is October 18, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity (revised) rose 4.1 percent in the second quarter of 2010, as output increased 8.4 percent and hours increased 4.1 percent. Productivity grew 9.9 percent in the durable goods industries and shrank 2.4 percent in the nondurable goods industries. Unit labor costs in manufacturing declined 5.9 percent in the second quarter of 2010 and fell 7.3 percent over the last four quarters.

  • In durable goods industries, productivity (revised) grew 9.9 percent from previous quarter, annual rate in the second quarter of 2010, as output increased 13.6 percent, while hours worked also increased 3.4 percent.

  • In nondurable goods industries, productivity (revised) fell 2.4 percent from previous quarter, annual rate in the second quarter of 2010, as output increased 2.8 percent, while hours worked also increased 5.3 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2010 Revised,” USDL 10-1211, released September 2, 2010; next release is November 4, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade updated

  • Year to date July 2010, U.S. manufactured goods exports accounted for 80.9 percent of all U.S. exports of goods, compared with 82.0 percent a year ago.

  • Manufactured goods exports in July were 4.0 percent lower than the previous month. Imports were down 3.7 percent.

  • The year to date July 2010 trade deficit in manufactured goods of $214.5 billion was $43.8 billion more when compared with $170.7 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-135, BEA10-43, FT-900(10-07),” released September 9, 2010; next release is October 14, 2010)
    http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in July, up four of the last five months, increased $4.4 billion or 2.2 percent to $200.6 billion. This followed a 0.2 percent June increase. Transportation equipment, also up four of the last five months, had the largest increase, $3.4 billion or 6.9 percent to $52.7 billion.

  • In July, shipments increased in transportation equipment (6.9 percent), computer and electronic products (6.8 percent), and electrical equipment, appliances, components (0.1 percent). Shipment decreased in, machinery (-4.6 percent), fabricated metal products (-0.9 percent), and primary metals (-0.1 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-07, CB10-127),”August 25, 2010; next release is September 24, 2010)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In August 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.1 percent compared to previous month.

  • The index for finished energy goods was up 2.2 percent from previous month.

  • A seasonally adjusted increase of price from July to August was registered in gasoline price (7.5 percent), home heating oil and distillates (7.0 percent), No. 2 diesel fuel (6.4 percent), liquefied petroleum gas (5.9 percent), residential gas (1.4 percent), and residential electric power (0.6 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-1280,” released September 16, 2010; next release is October 14, 2010)
    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 August for the 13th consecutive month, and the overall economy grew for the 16th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in August as the PMI registered 56.3 percent, an increase of 0.8 percentage point when compared to July's reading of 55.5 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 August were: Production increased 2.9 points to 59.9, Employment up 1.8 points to 60.4, Inventories up 1.2 points to 51.4, Supplier Deliveries down 1.7 points to 56.6, and New Orders decreased 0.4 points to 53.1.

    U.S. Industries Reporting Growth in August 2010

    • Primary Metals
    • Apparel, Leather & Allied Products
    • Transportation Equipment
    • Fabricated Metal Products
    • Electrical Equipment, Appliances & Components
    • Miscellaneous Manufacturing
    • Computer & Electronic Products
    • Paper Products
    • Chemical Products
    • Food, Beverage & Tobacco Products
    • Printing & Related Support Activities

    Institute for Supply Management data released September 1, 2010; next release is October 1, 2010)
    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