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Manufacturing Biweekly Update

October 14, 2011 [past updates]


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


Biweekly Notes

So Many U.S. Manufacturing Jobs, So Few Skilled Workers

U.S. manufacturers are failing to fill thousands of vacant jobs, surprising when 14 million people are searching for work. Technology giant Siemens Corp., the U.S. arm of Germany's Siemens AG, has over 3,000 jobs open all over the country. More than half require science, technology, engineering, and math-related skills. Other companies report job vacancies that range from six to 200, with some positions open for at least nine months. Manufacturing is hurt by a dearth of skilled workers. A survey by ManpowerGroup found that a record 52 percent of U.S. employers have difficulty filling critical positions within their organizations — up from 14 percent in 2010. On average, companies usually take seven weeks to fill job openings. Most of the jobs hard to fill are for skilled trades, Internet technology, engineers, sales representatives and machine operators. Math, engineering, technology and computer science students accounted for about 11.1 percent of college graduates in 1980, according to government data. That share dropped to about 8.9 percent in 2009.
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(Reuters |CNBC |October 13, 2011)

U.S. Manufacturing Unexpectedly Accelerates as Export Demand Spurs Output

Manufacturing in the U.S. unexpectedly accelerated in September, propelled by gains in exports and production. The Institute for Supply Management’s factory index climbed to 51.6 last month from 50.6 in August, the Tempe, Arizona-based group said today. A level of 50 is the dividing line between growth and contraction. The median forecast of 82 economists surveyed by Bloomberg News projected a drop to 50.5. Estimates for the manufacturing index in the Bloomberg survey ranged from 45 to 52. While 50 is the midway point between expansion and contraction in the industry, a reading above 42.5 generally indicates an expansion in the overall economy, the group says. The ISM report showed the production index climbed over 50 after contracting in August for the first time since May 2009, when the economy was in a recession. Exports accelerated and have grown for 27 consecutive months.
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(Bloomberg |October 3, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In September 2011, average hourly earnings in manufacturing remained the same level as previous month at $18.92 (preliminary), but up 1.4 percent from September 2010’s $18.65.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-1441,” released October 7, 2011; next release is November 4, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the second-quarter of 2011, hourly compensation from previous quarter, annual rate (revised) was up 3.1 percent in total manufacturing, up 2.4 percent in durable manufacturing and up 4.1 percent in nondurable manufacturing.

  • In the second-quarter of 2011, hourly compensation of all manufacturing workers increased 2.8 percent (revised), compared to a 1.4 percent increase during the second-quarter of 2010. Real hourly compensation in the total manufacturing sector decreased -0.6 percent (revised) in the second-quarter of 2011, compared to -0.4 percent decrease in the second-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2011, Revised,” USDL 11-1276, released September 1, 2011; next release is November 3, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • • In the second quarter of 2011, manufacturing profits increased 14.8 percent, or $32.3 billion, to $249.9 billion from $217.6 billion in the first quarter. Compared with second quarter profits of 2010, manufacturing profits were up $12.6 billion in the second quarter of 2011.

  • • Second quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $87.1 billion from the first quarter of 2011 to $945.9 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-49,” released September 29, 2011; next release is October 27, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp2q11_3rd.pdf

       

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Manufacturing Employment updated

  • In September 2011, manufacturing employment went down, with a decrease of 13,000 jobs.

  • In September, durable goods manufacturing lost 8,000 jobs with decreases in furniture and related products (-3,600), miscellaneous manufacturing (-3,000), fabricated metal products (-2,900), nonmetallic mineral products (-1,600), electrical equipment and appliances (-1,400), and wood products (-900). However, job gains occurred in machinery (2,800), primary metals (1,400), transportation equipment (1,000), and computer and electronic products (600).

  • In September, employment in nondurable goods manufacturing sector lost 5,000 jobs with decreases in printing and related support activities (-4,200), textile product mills (-2,200), beverages and tobacco products (-1,800), food manufacturing (-900), and textile mills (-700). Meanwhile, job gain occurred in chemicals (1,400), plastics and rubber products (1,400), petroleum and coal products (800), leather and allied products (600), paper and paper products (500), and apparel (300).

  • 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-11-1441,” released October 7, 2011; next release is November 4, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In August 2011, manufacturing production was up 0.5 percent from previous month and was 3.8 percent above its year-earlier level.

  • Production of durable goods was up 0.8 percent from previous month. The durable industries that registered increases in output included aerospace and miscellaneous transportation equipment (2.2 percent), motor vehicles and parts (1.7 percent), computer and electronic products (1.3 percent), primary metal (1.2 percent), furniture and related products (1.2 percent), electrical equip., appliances, and components (1.0 percent), and miscellaneous (0.5 percent). The durable industries that registered decreases in output included wood products (-0.8 percent), machinery (-0.4 percent), and nonmetallic mineral products (-0.2 percent). The output of fabricated metal products remained unchanged.

  • Production of nondurable goods was up 0.1 percent from the previous month. The nondurable manufacturing industries that registered increases in output included petroleum and coal products (1.1 percent), and chemicals (0.2 percent). The nondurable industries that registered decreases in output included textile and product mills (-1.0 percent), printing and support (-0.9 percent), paper (-0.3 percent), apparel and leather (-0.3 percent).,food, beverage, and tobacco products (-0.2 percent), and plastics and rubber products (-0.2 percent).

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

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

       

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Manufacturing Capacity Utilization

  • In August 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 0.2 percent above their revised capacity utilization level in July 2011.

  • In August 2011, durable manufacturing, capacity utilization operated at 74.0 percent capacity, up 0.5 points from previous month. Increased capacity utilization was registered in aerospace and miscellaneous transportation equipment (1.6 points), motor vehicles and parts (1.0 points), primary metals (1.0 points), furniture and related products (1.0 points), electrical equip., appliances, and components (0.8 points), computer and electronic products (0.4 points), miscellaneous (0.2 points), and fabricated metal products (0.1 points). Decreased capacity utilization was registered in wood products (-0.4 points), and machinery (-0.4 points). Meanwhile, capacity utilization was unchanged for nonmetallic mineral products.

  • In August 2011, non-durable manufacturing, capacity utilization operated remained at 77.2 percent. Increased capacity utilization was registered in petroleum and coal products (0.8 points).and chemicals (0.2 points), and decreased capacity utilization was registered in textile and product mills (-0.6 points), printing and support (-0.5 points), food, beverage, and tobacco products (-0.3 points), paper (-0.2 points), and apparel and leather (-0.2 points). Meanwhile, capacity utilization was unchanged for plastics and rubber products.

  • 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 September 15, 2011; next release is October 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity fell -1.5 percent in the second-quarter of 2011, as output increased 1.2 percent and hours increased 2.7 percent. Productivity was down -2.7 percent in the durable goods industries and up 1.3 percent in the nondurable goods industries. Unit labor costs in manufacturing increased 4.6 percent in the second-quarter of 2011, and increased 0.4 percent over the last four quarters.

  • In durable goods industries, productivity was down 2.7 percent from previous quarter, as output increased 2.2 percent, and hours worked increased 5.0 percent.

  • In nondurable goods industries, productivity was up 1.3 percent from previous quarter, as output increased 0.3 percent, while hours worked decreased -0.9 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Second-Quarter 2011, Revised,” USDL 11-1276, released September 1, 2011; next release is November 3, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade updated

  • Manufactured goods exports in August were 4.81 percent higher than the previous month. Imports were 4.91 percent higher.

  • Year to date August 2011, U.S. manufactured goods exports accounted for 85.4 percent of all U.S. exports of goods, compared with 86.8 percent a year ago.

  • The year to date August 2011 trade deficit in manufactured goods of $296.7 billion was $38.7 billion more when compared with $258.0 billion a year ago.

    (USA Trade Online, U.S. Census Bureau October 13 data release. Next release is November 10, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments updated

  • Shipments of manufactured durable goods in August, down following three consecutive monthly increases, decreased $0.3 billion or 0.1 percent to $201.1 billion, revised from the previously published 0.2 percent decrease. This followed a 2.1 percent July increase.

  • In August, shipments increased in machinery (5.2 percent), electrical equipment, appliances, and components (3.1 percent), furniture and related products (2.9 percent), fabricated metal products (0.7 percent), nonmetallic mineral products (0.7 percent), and computers and electronic products (0.2 percent). However, shipments decreased in transportation equipment (-4.6 percent), wood products (-1.4 percent), primary metals (-0.7 percent), and miscellaneous durable goods (-0.6 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-08, CB11-166),” October 4, 2011; next release is November 3, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In August 2011, 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 down 1.0 percent from previous month.

  • A seasonally adjusted increase of price from July to August was registered in residential gas (0.8 percent). A decrease in price from July to August was registered in liquefied petroleum gas (-6.0 percent), no. 2 diesel fuel (-5.9 percent), home heating oil and distillates (-1.2 percent), gasoline price (-1.0 percent), and residential electric power (-0.1 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-1326,” released September 14, 2011; next release is October 18, 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 September for the 26th consecutive month, and the overall economy grew for the 28th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in September as the PMI registered 51.6 percent, an increase of 1 percentage point when compared to August's reading of 50.6 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 September were: Supplier Deliveries, 0.8 points increase to 51.4; Production, 2.6 points increase to 51.2; Employment, 2.0 points increase to 53.8; Inventories, 0.3 points decrease to 52.0; and New Orders, remained the same at 49.6.

    U.S. Industries Reporting Growth in September 2011

    • Wood Products
    • Petroleum & Coal Products
    • Food, Beverage & Tobacco Products
    • Apparel, Leather & Allied Products
    • Nonmetallic Mineral Products
    • Machinery
    • Miscellaneous Manufacturing
    • Transportation Equipment
    • Plastics & Rubber Products
    • Printing & Related Support Activities
    • Chemical Products
    • Computer & Electronic Products

    (Institute for Supply Management, data released October 3, 2011; next release is November 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