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Manufacturing Biweekly Update

October 15, 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 up up
Goods Shipments down up


Biweekly Notes

U.S. Manufacturing Growth Likely to Slow

Production by U.S. manufacturers is likely to keep growing but at a slower pace, according to a new survey by the Manufacturers Alliance/MAPI, a public policy and economic research group in Arlington, Va. MAPI’s survey of manufacturing companies in the third quarter yielded a composite index of 77, down from a record 81 in the second quarter. The index signals expanding industrial activity when it is 50 or above. Amid a tepid recovery of the overall economy, manufacturing has been a strong point over the past year. But recent indicators suggest that manufacturers are losing steam as consumer demand remains weak.

(The Wall Street Journal |October 14, 2010)
blogs.wsj.com

Manufacturing Growth in New York Area Tops Forecasts
Manufacturing in the New York region expanded in October at a faster pace than anticipated, signaling factories will keep driving the recovery in the world’s largest economy. The Federal Reserve Bank of New York’s general economic index rose to 15.7, the highest level in four months and more than twice the median forecast of economists surveyed by Bloomberg News. Readings greater than zero signal gains in the so-called Empire State Index covering New York, northern New Jersey and southern Connecticut. Overseas demand is spurring sales at manufacturers including Alcoa Inc., bolstering the economy and laying the ground for more hiring. At the same time, unemployment is restraining household spending, indicating a sustained economic revival will take time to develop.

(Bloomberg|October 15, 2010)
www.bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In September 2010, average hourly earnings in manufacturing were $18.63 (preliminary), up 0.22 percent from August 2010’s $18.59 (preliminary), and up 1.3 percent from September 2009’s $18.39.
       

(BLS/DOL Employment data from “The Employment Situation, USDL 10-1393,” released October 8, 2010; next release is November 5, 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 second quarter of 2010, manufacturing profits increased 10.7 percent, or $26.7 billion, to $277.1 billion from $250.4 billion in the first quarter. Compared with second quarter profits of 2009, manufacturing profits were up $137.4 billion in the second quarter of 2010.

  • Second quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 4.9 percent from the first quarter of 2010 to $1034.0 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-47,”released September 30, 2010; next release is October 29, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp2q10_3rd.pdf

       

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Manufacturing Employment updated

  • In September, 2010, manufacturing employment went down, with a decrease of 6,000 jobs.

  • In September, while there was no change in employment for durable goods manufacturing as a whole, job lost occurred in transportation equipment (-3,100), machinery (-1,900), wood products (-1,700), and furniture and related products (-1,500). Job gains occurred in fabricated metal products (2,700), computer and electronic products (1,800), nonmetallic mineral products (1,700), electrical equipment and appliances (1,600), miscellaneous manufacturing (1,000), and primary metals (200).

  • In September, nondurable goods manufacturing lost 6,000 jobs, with decreases in plastics and rubber products (-2,200), food manufacturing (-1,600), printing and related support activities (-1,500), apparel (-900), paper and paper products (-600), textile mills (-500), leather and allied products (-300), petroleum and coal products (-300), and chemicals (-200). Meanwhile, job gains occurred in beverages and tobacco products (1,400), and textile product mills (200).

  • 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-10-1393,” released October 8, 2010; next release is November 5, 2010) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • 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

  • 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 August 2010, U.S. manufactured goods exports accounted for 80.9 percent of all U.S. exports of goods, compared with 81.8 percent a year ago.

  • Manufactured goods exports in July were 2.2 percent higher than the previous month. Imports were up 4.7 percent.

  • The year to date August 2010 trade deficit in manufactured goods of $257.2 billion was $58.5 billion more when compared with $198.7 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-154, BEA10-49, FT-900(10-08),” released October 14, 2010; next release is November 10, 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 August, down following two consecutive monthly increases, decreased $3.1 billion or 1.5 percent to $197.9 billion. This followed a 2.5 percent July increase.

  • In August, shipments increased in machinery (3.9 percent), fabricated metal products (0.4 percent), electrical equipment, appliances, components (0.2 percent), and primary metals (0.1 percent). Shipment decreased in transportation equipment (-5.9 percent), and computer and electronic products (-2.1 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-08, CB10-148),”September 24, 2010; next release is October 27, 2010)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In September 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 0.5 percent from previous month.

  • A seasonally adjusted increase of price from August to September was registered in liquefied petroleum gas (6.1 percent), and residential electric power (0.4 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-4.0 percent), No. 2 diesel fuel (-3.1 percent), home heating oil and distillates (-2.6 percent), and gasoline price (-1.8 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-1425,” released October 14, 2010; next release is November 16, 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 September for the 14th consecutive month, and the overall economy grew for the 17th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in September, but at a slower rate as the PMI registered 54.4 percent, a decrease of 1.9 percentage points when compared to August's reading of 56.3 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: Production decreased 3.4 points to 56.5, Employment down 3.9 points to 56.5, Inventories up 4.2 points to 55.6, Supplier Deliveries down 4.3 points to 52.3, and New Orders decreased 2.0 points to 51.1.

    U.S. Industries Reporting Growth in September 2010

    • Apparel, Leather & Allied Products
    • Fabricated Metal Products
    • Electrical Equipment, Appliances & Components
    • Primary Metals
    • Miscellaneous Manufacturing
    • Transportation Equipment
    • Computer & Electronic Products
    • Furniture & Related Products
    • Plastics & Rubber Products
    • Chemical Products
    • Paper Products
    • Machinery
    • Food, Beverage & Tobacco Products

    (Institute for Supply Management, data released October 1, 2010; next release is November 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