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Manufacturing Biweekly Update

November 9, 2012 [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 no change up
Productivity down up
Exports down up
Goods Shipments up up


Biweekly Notes

Manufacturing companies thrive in America as industry faces 'renaissance'

The United States may have shifted to a postindustrial economy, but that does not mean the manufacturing sector is dead. Far from it. From coast to coast, manufacturers are making more products, but with fewer people, as the sector makes an improbable rebound after a tough recession. “I think it's a time of great opportunity in manufacturing,” said Mary Andringa, chair of the National Association of Manufacturers. “What’s really outstanding is the fact that in 2010, the U.S. had an output of $4.8 trillion of manufactured goods. That was up from $4.1 (trillion) in 2000. And we’ve been through two recessions in the last decade. The United States produces 21 percent of the world’s manufactured goods. We’re number one, followed by China at 15 and Japan at 12 percent. There’s a renaissance going on.” In fact, the manufacturing sector is staging something of a comeback, adding a half million jobs over the past two years as the economy has slowly gained momentum, according to the Bureau of Labor Statistics. But over the long run, the manufacturing sector is fighting tough headwinds, shedding some five million jobs over the past decade against tough global competition. That means manufacturers are doing more with less, making steady gains in productivity.

(NBC News| November 8, 2012)
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Manufacturing in U.S. Expands at Faster Pace in October

Manufacturing expanded more than forecast, consumer confidence rose to a four-year high and fewer Americans filed claims for unemployment benefits, pointing to resilience in the U.S. economy heading into the fourth quarter. The Institute for Supply Management’s factory index rose to a five-month high of 51.7 in October from 51.5, the Tempe, Arizona, group reported today. The Conference Board’s sentiment index increased to 72.2, the highest since February 2008. Applications for jobless benefits fell by 9,000 to 363,000 in the week ended Oct. 27, the Labor Department said in Washington. “We’re getting a sense of stabilization, we’re no longer slipping,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “This should ease concerns that we were feeling two or three months ago about the state of the economy.”

(Bloomberg |November 1, 2012)
[Read More]

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates UPDATED

  • In October 2012, average hourly earnings in manufacturing were $19.15 (preliminary), up 0.16 percent from previous month, and up 0.79 percent from October 2011’s $19.00.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-2164,” released November 2, 2012; next release is December 7, 2012)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) UPDATED

  • In the third-quarter of 2012, hourly compensation from previous quarter, annual rate (preliminary) was up (+1.2 percent) in total manufacturing, up (+0.2 percent) in durable manufacturing and up (+2.9 percent) in nondurable manufacturing.

  • In the third-quarter of 2012, hourly compensation of all manufacturing workers increased (+0.6 percent), compared to a (+2.7 percent) increase during the third-quarter of 2011. Real hourly compensation in the total manufacturing sector decreased (-1.1 percent) in the third-quarter of 2012, compared to (-1.0 percent) decrease in the third-quarter of 2011.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2012,” USDL 12-2163, released November 1, 2012; next release is December 5, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the second quarter of 2012, manufacturing profits increased 2.6 percent, or $9.3 billion, to $372.8 billion from $363.5 billion in the first quarter. Compared with second quarter profits of 2011, manufacturing profits were up $143.6 billion in the second quarter of 2012.

  • Second quarter 2012 profits for all non-financial industries (manufacturing being a subcategory) increased $29.0 billion from the first quarter to $1245.8 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 12-44,” released September 27, 2012; next release is October 26, 2012)
    http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp2q12_3rd.pdf

           

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    Manufacturing Employment UPDATED

    • In October 2012, manufacturing employment went up, with an increase of 13,000 jobs.

    • In October, durable goods manufacturing gained 5,000 jobs with increases in wood products (+2,700), computer and electronic products (+1,600), transportation equipment (+1,400), nonmetallic mineral products (+1,400), and primary metals (+1,000). However, job loss occurred in fabricated metal products (-1,200), machinery (-1,100), miscellaneous manufacturing (-1,000), electrical equipment and appliances (-100), and furniture and related products (-100).

    • In October, nondurable goods manufacturing gained 8000 jobs with increases in food manufacturing (+3,700), chemicals (+1,600), plastics and rubber products (+1,600), beverages and tobacco products (+1,500), printing and related support activities (+900), petroleum and coal products (+600), textile product mills (+400), and apparel (+100). However, job loss occurred in paper and paper products (-900), textile mills (-800), and leather and allied products (-400).

    • The manufacturing employment of 12.0 million workers represents 8.9 percent of total non-farm employment.

      (BLS/DOL Employment data from “The Employment Situation, USDL 12-2164,” released November 2, 2012; next release is December 7, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

           

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    Manufacturing Production

    • In September 2012, manufacturing production was up (+0.2 percent) from previous month and was up (+3.2 percent) above its year-earlier level.

    • In September 2012, production of durable goods was up (+0.1 percent) from the previous month. The durable industries that registered increases in output included aerospace and miscellaneous transportation equipment (+2.4 percent), electrical equip., appliances, and components (+1.8 percent), wood products (+0.7 percent), fabricated metal products (+0.6 percent), furniture and related products (+0.5 percent), machinery (+0.4 percent), computer and electronic products (+0.1 percent), and miscellaneous manufactured product (+0.1 percent). The durable industry that registered decrease in output included motor vehicles and parts (-2.5 percent), and primary metals (-1.0 percent). There was no change of output in nonmetallic mineral products.

    • In September 2012, production of nondurable goods was up (+0.3 percent) from the previous month. The nondurable industries that registered increases in output included apparel and leather (+1.6 percent), food, beverage and tobacco products (+1.1 percent), textile and product mills (+0.4 percent), and paper (+0.2 percent). The durable industry that registered decrease in output included printing and support (-1.1 percent), plastics and rubber products (-0.7 percent), and petroleum and coal products (-0.1 percent). There was no change of output in chemicals.

    • In September 2012, production of other manufacturing goods (non-NAICS) was down (-0.1 percent).

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released October 16, 2012; next release is November 16, 2012)
      http://www.federalreserve.gov/releases/g17/Current/g17.pdf

           

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    Manufacturing Capacity Utilization

    • In September 2012, manufacturing industries (NAICS based) operated at 77.4 percent of capacity, the same level of the previous month, and down (-1.3 percentage points) below their 1972-2011 average of 78.7 percent.

    • In September 2012, durable manufacturing, capacity utilization operated at 76.8 percent capacity, down (-0.1 percentage points) from the previous month. Increased capacity utilization was registered in aerospace and miscellaneous transportation equipment (+1.6 points), electrical equip., appliances, and components (+1.4 points), wood products (+0.6 points), fabricated metal products (+0.5 points), furniture and related products (+0.4 points), machinery (+0.2 points), and nonmetallic mineral products, (+0.2 points). Decreased capacity utilization was registered in motor vehicles and parts (-2.2 points), primary metals (-0.8 points), miscellaneous (-0.3 points), and computer and electronic products (-0.3 points).

    • In September 2012, non-durable manufacturing, capacity utilization operated 78.1 percent capacity, up (+0.2 points) from the previous month. Increased capacity utilization was registered in apparel and leather (+1.1 points), food, beverage, and tobacco products (+0.7 points), textile and product mills (+0.4 points), paper (+0.3 points), and petroleum and coal products (+0.2 points). Decreased capacity utilization was registered in printing and support (-0.7 points), and plastics and rubber products (-0.6 points). There was no change of capacity utilization in chemicals.

    • The index for other manufacturing industries (non-NAICS) was up (+0.1 points).

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released October 16, 2012; next release is November 16, 2012)
      http://www.federalreserve.gov/releases/g17/Current/g17.pdf

           

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    Manufacturing Productivity UPDATED

    • Manufacturing sector productivity (preliminary) was down (-0.4 percent) in the third-quarter of 2012, as output decreased (-0.6 percent) and hours decreased (-0.2 percent). Productivity was down (-0.7 percent) in the durable goods industries and down (-0.1 percent) in the nondurable goods industries. Unit labor costs in manufacturing increased (+1.5 percent) in the third-quarter of 2012, and decreased (-0.8 percent) over the last four quarters.

    • In durable goods industries, productivity was down (-0.7 percent) from previous quarter, as output decreased (-1.0 percent), while hours worked decreased (-0.4 percent).

    • In nondurable goods industries, productivity was down (-0.1 percent) from previous quarter, while output remained the same, and hours worked increased (+0.1 percent).

      (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2012,” USDL 12-2163, released November 1, 2012; next release is December 5, 2012)
      http://www.bls.gov/news.release/pdf/prod2.pdf

           

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    Manufacturing Trade UPDATED

    • Manufactured goods exports in September 2012 were (-0.50 percent) lower than the previous month. Imports were (-4.26 percent) lower.

    • Year-to-date September 2012, U.S. manufactured goods exports accounted for 87.4 percent of all U.S. exports of goods, compared with 86.1 percent a year ago.

    • The year-to-date September 2012 trade deficit in manufactured goods of $339.1 billion was $10.2 billion more when compared with $329.0 billion a year ago.

      (USA Trade Online, U.S. Census Bureau, released November 8, 2012; Next release is December 11, 2012)
      http://www.usatradeonline.gov/

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    Manufactured Goods Shipments UPDATED

    • New orders for manufactured goods in September, up two of the last three months, increased $22.0 billion or 4.8 percent to $475.4 billion, the U.S. Census Bureau reported today. This followed a 5.1 percent August decrease. Excluding transportation, new orders increased 1.4 percent.

    • In September, shipments increased in computers and electronic products (+2.2 percent), primary metals (+1.3 percent), miscellaneous durable goods (+1.3 percent), transportation equipment (+1.1 percent), and fabricated metal products (+0.2 percent). However, shipments decreased in wood products (-1.3 percent), electrical equipment, appliances, and components (-0.7 percent), nonmetallic mineral products (-0.3 percent), furniture and related products (-0.1 percent), and machinery (-0.1 percent),

      (Census Bureau/DOC data from “Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(12)-8, CB12-187),” October 4, 2012; next release is November 2, 2012)
      http://www.census.gov/manufacturing/m3/

           

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    Manufactured Goods Prices

    • In September 2012, there was no change in the Producer Price Index (PPI) for finished goods, except foods and energy, when compared to previous month.

    • The index for finished energy goods was up (+4.7 percent) from previous month.

    • A seasonally adjusted increase in price from August to September was registered in gasoline (+9.8 percent), no. 2 diesel fuel (+9.2 percent), liquefied petroleum gas (+3.5 percent), home heating oil and distillates (+3.1 percent), residential gas (+1.3 percent), and residential electric power (+0.3 percent).

      (BLS/DOL data from “Producer Price Indexes, USDL 12-2032,” released October 12, 2012; next release is November 14, 2012)
      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 October for the second consecutive month following three months of slight contraction, and the overall economy grew for the 41st consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

    • Manufacturing expanded in October as the PMI™ registered 51.7 percent, an increase of 0.2 percentage point when compared to September's reading of 51.5 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 September were Production, +2.9 points increase to 52.4; New Orders +1.9 points increase to 54.2; Employment, -2.6 points decrease to 52.1; Supplier Deliveries, -0.7 points decrease to 49.6; and Inventories, -0.5 points decrease to 50.0.

      U.S. Industries Reporting Growth in September 2012

      • Petroleum & Coal Products
      • Furniture & Related Products
      • Apparel, Leather & Allied Products
      • Paper Products
      • Miscellaneous Manufacturing
      • Food, Beverage & Tobacco Products
      • Plastics & Rubber Products
      • Chemical Products.

      (Institute for Supply Management, data released November 1, 2012; next release is December 3, 2012)
      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