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Manufacturing Biweekly Update

December 23, 2010 [past updates]


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


Biweekly Notes

Tipton facility to be the largest thin-film manufacturing plant in U.S.

Abound Solar, a Loveland, Colo., based manufacturer of next-generation thin-film photovoltaic solar modules, announced that is has closed on a $400 million loan guarantee from the Department of Energy (DOE). Abound will be using the financing to develop the country’s largest solar thin-film module manufacturing plant facility in Indiana and to expand their current manufacturing facility in Longmont, Colo.

(CleanEnergyAuthority.com | December 16, 2010)
cleanenergyauthority.com

Growing Optimism in Manufacturing

Senior management at U.S. manufacturing companies is once again optimistic, according to a Grant Thornton LLP November survey. Nearly half (49%) believe the U.S. economy will improve in the next six months, and the same amount (49%) say they plan to increase staff during the same period. Manufacturing leaders are also optimistic about their own businesses, with 81% feeling optimistic about their companies’ growth over the next six months.

(Today's Medical Developments |December 17, 2010)
www.onlinetmd.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In November 2010, average hourly earnings in manufacturing were $18.70 (preliminary), up 0.11 percent from October 2010’s $18.68 (preliminary), and up 1.74 percent from November 2009’s $18.38.

    (BLS/DOL Employment data from “The Employment Situation, USDL 10-1662,” released December 3, 2010; next release is January 7, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • During the third quarter of 2010, hourly compensation from previous quarter, annual rate (revised) was up 1.6 percent in total manufacturing, up 0.8 percent in durable manufacturing and up 2.4 percent in nondurable manufacturing.

  • In the third quarter of 2010, hourly compensation of all manufacturing workers increased 1.0 percent (revised), compared to a 5.2 percent increase during the third quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 0.3 percent (revised) in the third quarter of 2010, compared to 6.9 percent increase in the third quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2010, Revised,” USDL 10-1661, released December 1, 2010; next release is February 3, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits (updated)

  • In the third quarter of 2010, manufacturing profits decreased 2.9 percent, or $7.9 billion, to $269.2 billion from $277.1 billion in the first quarter. Compared with third quarter profits of 2009, manufacturing profits were up $117.4 billion in the third quarter of 2010.

  • Third quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) decreased $0.7 billion from the second quarter of 2010 to $1,033.3 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-54,” released December 22, 2010; next release is January 28, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_3rd.pdf

       

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Manufacturing Employment

  • In November, 2010, manufacturing employment went down, with a decrease of 13,000 jobs.

  • In November, durable goods manufacturing lost 5,000 jobs with decrease in nonmetallic mineral products (-2,700), furniture and related products (-2,400), transportation equipment (-1,700), electrical equipment and appliances (-1,300), miscellaneous manufacturing (-400), and primary metals (-200). Job gains occurred in machinery (1,700), fabricated metal products (1000), computer and electronic products (700), and wood products (600).

  • In November, nondurable goods manufacturing lost 8000 jobs, with decreases in chemicals (-1,900), beverages and tobacco products (-1,700), paper and paper products (-1,600), textile product mills (-1,400), food manufacturing (-800), apparel (-800), and textile mills (-100). Job gains occurred in plastics and rubber products (600), petroleum and coal products (200), and leather and allied products (100). There was no change in employment in printing and related support activities.

  • The manufacturing employment of 11.6 million workers represents 8.9 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-10-1662,” released December 3, 2010; next release is January 7, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production (updated)

  • In November 2010, manufacturing production was up 0.3 percent from previous month and was 5.3 percent above its year-earlier level.

  • Production of durable goods was up 0.4 percent from the previous month. The durable industry that registered gains included primary metals (3.3 percent); wood products (1.6 percent); fabricated metal products (1.3 percent); electrical equipment, appliances, and components (1.2 percent); machinery (1.2 percent); computer and electronic products (1.1 percent); miscellaneous manufacturing (1.1 percent); aerospace and miscellaneous transportation equipment (0.9 percent); and furniture and related products (0.7 percent). Motor vehicles and parts declined -6.0 percent while Nonmetallic mineral products declined 0.3 percent, the only durable manufacturing industries that registered decreases in output.

  • Production of nondurable goods was up 0.2 percent from previous month. The nondurable manufacturing industries that registered increases in output included printing and support (1.6), paper (1.5 percent), plastics and rubber products (1.1 percent), chemicals (0.6 percent), and petroleum and coal products (0.4 percent), The nondurable industry that registered decreases in output included textile and product mills (-2.2 percent); food, beverages, and tobacco products (-0.7 percent); and apparel and leather (-0.5 percent).

  • Index for other manufacturing industries (non-NAICS) declined 0.7 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released December 15, 2010; next release is January 14, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization (updated)

  • In November 2010, manufacturing industries (NAICS based) operated at 73.2 percent of capacity, 5.8 percentage points below their 1972-2009 average of 79.0 percent and 0.3 percent points higher than their revised capacity utilization level in October 2010.

  • In November 2010, durable manufacturing, capacity utilization operated at 70.9 percent capacity, up 0.2 points from previous month (revised). Increased capacity utilization was registered in primary metal (2.1 points); wood products (1.3 points); fabricated metal products (1.1 points); machinery (1.0 point); electrical equipment, appliances, and components (0.9 points); furniture and related products (0.8 points); aerospace and miscellaneous transportation equipment (0.5 points); miscellaneous (0.5 points); and computer and electronic products (0.3 points). Decreased capacity utilization was demonstrated in motor vehicles and parts (-3.7 points). There was no change in nonmetallic mineral products.

  • In November 2010, non-durable manufacturing, capacity utilization increased 0.3 percentage points in from previous month (revised) to 76.0 percent. Increased capacity utilization was registered in paper (1.3 points), printing and support (1.2 points), plastics and rubber products (0.6 points), chemical (0.5 points), petroleum and coal products(0.5 points), and apparel and leather (0.1 points). Decreased capacity utilization was only registered in textile and product mills (1.3 points) and food, beverage and tobacco products (0.6 points).

  • The index for other manufacturing industries (non-NAICS) declined 0.5 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released December 15, 2010; next release is January 14, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity (Revised) rose 0.6 percent in the third quarter of 2010, as output increased 4.2 percent and hours increased 3.6 percent. Productivity was down 0.5 percent in the durable goods industries and up 3.2 percent in the nondurable goods industries. Unit labor costs in manufacturing increased 1.0 percent in the third quarter of 2010 and fell 2.9 percent over the last four quarters.

  • In durable goods industries, productivity (revised) was down 0.5 percent from previous quarter, as output increased 6.0 percent, while hours worked increased 6.5 percent.

  • In nondurable goods industries, productivity (revised) was up 3.2 percent from previous quarter, as output increased 2.2 percent, while hours worked decreased 0.9 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2010 Revised,” USDL 10-1661, released December 1, 2010; next release is February 3, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Year to date October 2010, U.S. manufactured goods exports accounted for 80.6 percent of all U.S. exports of goods, compared with 81.8 percent a year ago.

  • Manufactured goods exports in October were 5.9 percent higher than the previous month. Imports were also up 4.1 percent.

  • The year to date October 2010 trade deficit in manufactured goods of $338.5 billion was $75.6 billion more when compared with $262.9 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-185, BEA10-56, FT-900(10-10),” released December 10, 2010; next release is January 13, 2010)
    http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

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Manufactured Goods Shipments (updated)

  • Shipments of manufactured durable goods in November, also down three of the last four months, decreased $0.7 billion or 0.3 percent to $195.8 billion. This followed a 1.0 percent October decrease.

  • In November, shipments increased in primary metals (3.1 percent); machinery (1.3 percent); electrical equipment, appliances, and components (0.3 percent) and fabricated metal products (0.2 percent). Shipments decreased in transportation equipment (-3.3 percent) and computers and electronic products (-0.8 percent).

    ((Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-10, CB10-176),” December 23, 2010; next release is Jan. 27, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices (updated)

  • In November 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.3 percent compared to previous month.

  • The index for finished energy goods was up 2.1 percent from previous month.

  • A seasonally adjusted increase of price from October to November was registered in liquefied petroleum gas (5.9 percent), gasoline price (4.7 percent), No. 2 diesel fuel (4.8 percent), and home heating oil and distillates (7.0 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-2.2 percent), and residential electric power (-0.2 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-1599,” released December 14, 2010; next release is January 13, 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 November for the 16th consecutive month, and the overall economy grew for the 19th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in November and at an accelerated rate as the PMI registered 56.6 percent, a decrease of 0.3 percentage points when compared to October's reading of 56.9 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 November were: New Orders decreased 2.3 points to 56.6, Production decreased 7.7 points to 55.0, Employment decreased 0.2 points to 57.5, Inventories up 2.8 points to 56.7, and Supplier Deliveries up 6.0 points to 57.2.

    U.S. Industries Reporting Growth in November 2010

    • Computer & Electronic Products
    • Petroleum & Coal Products
    • Apparel, Leather & Allied Products
    • Machinery
    • Fabricated Metal Products
    • Plastics & Rubber Products
    • Transportation Equipment
    • Electrical Equipment, Appliances & Components
    • Chemical Products
    • Primary Metals

    (Institute for Supply Management, data released December 1, 2010; next release is January 3, 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