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Manufacturing Biweekly Update

February 3, 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 up up
Productivity down up
Exports down up
Goods Shipments up up


Biweekly Notes

Manufacturing in U.S. Bolsters Global Expansion: Economy

Manufacturing in the U.S. grew in January at the fastest pace in seven months, adding to signs of a global pickup from Germany to China. The Institute for Supply Management’s index climbed to 54.1, from 53.1 in December, the Tempe, Arizona-based group’s report showed today. Figures greater than 50 signal expansion. Other reports showed U.S. construction spending increased at the fastest pace in four months and companies added 170,000 workers to payrolls in January. Stocks rose on optimism the factory reports show the world economy is withstanding fallout from Europe’s debt crisis. Production, led by inventory rebuilding at the end of 2011, is poised to keep expanding in the U.S. as the need to update equipment drives orders at companies like Caterpillar Inc. (CAT) and demand for cars rises. U.S. “manufacturing growth points to an acceleration in the economy,” said Conrad DeQuadros, a senior economist at RDQ Economics LLC in New York. “China is weathering weaker activity in Europe quite well.”
(Bloomberg| February 1, 2012)
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U.S. manufacturing making comeback

The jobs are coming home. American companies that shipped work abroad now are starting to bring manufacturing jobs back to this country: Several hundred thousand manufacturing positions are expected to open in the United States in the next decade. Already, big companies such as Ford and smaller ones such as the maker of EdenPure space heaters have recently returned production to Ohio or say they will. The U.S. stands to gain 600,000 to 800,000 manufacturing jobs in the coming decade because of the return of production from abroad, said Harold Sirkin, a partner with Boston Consulting Group, which came out with a study on the issue in October. Total job gains could be 2.3 million to 3.2 million when taking into account the additional construction, transportation and retail jobs that will be needed to support the manufacturing jobs. The trend is expected to accelerate around 2015, when the cost advantage of producing items in China for sale in North America is expected to diminish to the point where companies will begin to rethink where they make certain goods, he said.
(The Columbus Dispatch| January 29, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates UPDATED

  • In January 2012, average hourly earnings in manufacturing were $19.08 (preliminary), up 0.1 percent from previous month, and up 1.06 percent from January 2011’s $18.88.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-0163,” released February 3, 2012; next release is March 9, 2012)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) UPDATED

  • In the fourth-quarter of 2011, 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 2.7 percent in nondurable manufacturing.

  • In the fourth-quarter of 2011, hourly compensation of all manufacturing workers increased 0.6 percent, compared to a 1.2 percent increase during the fourth-quarter of 2010. Real hourly compensation in the total manufacturing sector decreased -2.6 percent in the fourth-quarter of 2011, compared with change in the fourth-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth Quarter 2011, Preliminary” USDL 12-0162, released February 2, 2012; next release is March 7, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the third quarter of 2011, manufacturing profits increased 7.32 percent, or $18.3 billion, to $268.2 billion from $249.9 billion in the first quarter. Compared with third quarter profits of 2010, manufacturing profits were up $41.0 billion in the third quarter of 2011.

  • Third quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $22 billion from the second quarter of 2011 to $967.9 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-63,” released December 22, 2011; next release is March 29, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp3q11_3rd.pdf

       

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Manufacturing Employment UPDATED

  • In January 2012, manufacturing employment went up, with an increase of 50,000 jobs.

  • In January, durable goods manufacturing gained 44,000 jobs with increases in fabricated metal products (10,900), machinery (10,500), transportation equipment (10,300), miscellaneous manufacturing (5,300), wood products (3,100), nonmetallic mineral products (2,300), primary metals (1,700), furniture and related products (1,500), and electrical equipment and appliances (900). However, job loss occurred in computer and electronic products (-1,900).

  • In January, nondurable goods manufacturing gained 6000 jobs with increases in chemicals (2,200), printing and related support activities (1,700), beverages and tobacco products (1,300), petroleum and coal products (1,100), textile mills (700), leather and allied products (500), and apparel (100). However, job loss occurred in plastics and rubber products (-1,000), paper and paper products (-800), and textile product mills (-300). Meanwhile, there was no change of employment in food manufacturing.

  • The manufacturing employment of 11.9 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-0163,” released February 3, 2012; next release is March 9, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In December 2011, manufacturing production was up 0.9 percent from previous month and was 3.7 percent above its year-earlier level.

  • Production of durable goods was up 0.9 percent from previous month. The durable industries that registered increases in output included wood products (4.2 percent), primary metal (3.2 percent), machinery (2.1 percent), miscellaneous (1.2 percent), fabricated metal products (1.1 percent), computer and electronic products (1.0 percent), and motor vehicles and parts (0.6 percent). The durable industries that registered decreases in output included aerospace and miscellaneous transportation equipment (-1.2 percent), nonmetallic mineral products (-0.8 percent), furniture and related products (-0.8 percent), and electrical equip., appliances, and components (-0.2 percent).

  • Production of nondurable goods was up 0.8 percent from the previous month. The nondurable manufacturing industries that registered increases in output included plastics and rubber products (1.6 percent), chemicals (1.2 percent), petroleum and coal products (1.1 percent),textile and product mills (1.0 percent), food, beverage, and tobacco products (0.6 percent), and printing and support (0.5 percent). The nondurable industries that registered decreases in output included apparel and leather (-0.5 percent), and paper (-1.0 percent).

  • Other manufacturing industries (non-NAICS) was up (2.3 percent).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released January 18, 2012; next release is February 15, 2012)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In December 2011, manufacturing industries (NAICS based) operated at 76.4 percent of capacity, 2.4 percentage points below their 1972-2010 average of 78.8 percent, and 0.6 percentage points above their revised capacity utilization level in November 2011.

  • In December 2011, durable manufacturing, capacity utilization operated at 75.0 percent capacity, up 0.6 points from previous month. Increased capacity utilization was registered in wood products (2.8 points), primary metals (2.5 points), machinery (1.6 points), fabricated metal products (1.0 points), miscellaneous (0.7 points), motor vehicles and parts (0.3 points), and computer and electronic products (0.2 points). Decreased capacity utilization was registered in aerospace and miscellaneous transportation equipment (-1 points), furniture and related products (-0.5 points), and nonmetallic mineral products (-0.3 points). There was no change of capacity utilization in electrical equip., appliances, and components.

  • In November 2011, non-durable manufacturing, capacity utilization operated 78.0 percent capacity, up 0.6 from previous month. Increased capacity utilization was registered in plastics and rubber products (1.4 points), petroleum and coal products (1.0 points), chemicals (0.9 points), textile and product mills (0.8 points), printing and support (0.4 points), and food, beverage, and tobacco products (0.3 points). Decreased capacity utilization was registered in paper (-0.7 points), and apparel and leather (-0.3 points).

  • The index for other manufacturing industries (non-NAICS) increased (1.5 points).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released January 18, 2011; next release is February 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity UPDATED

  • Manufacturing sector productivity was down (-0.4 percent) in the fourth-quarter of 2011, as output increased (3.8 percent) and hours increased (4.2 percent). Productivity was down (-0.4 percent) in the durable goods industries and up (1.3 percent) in the nondurable goods industries. Unit labor costs in manufacturing increased (1.6 percent) in the fourth-quarter of 2011, and decreased (-1.1 percent) over the last four quarters.

  • In durable goods industries, productivity was down (-0.4 percent) from previous quarter, as output increased (6.3 percent), while hours worked increased (6.7 percent).

  • In nondurable goods industries, productivity was up (1.3 percent) from previous quarter, as output increased (1.5 percent), and hours worked increased (0.2 percent).

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth-Quarter 2011, Preliminary,” USDL 12-0162, released February 2, 2012; next release is March 7, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in November were 4.28 percent lower than the previous month. Imports were 1.86 percent lower.

  • Year to date November 2011, U.S. manufactured goods exports accounted for 85.5 percent of all U.S. exports of goods, compared with 86.3 percent a year ago.

  • The year to date November 2011 trade deficit in manufactured goods of $416.0 billion was $36.1 billion more when compared with $379.9 billion a year ago.

    (USA Trade Online, U.S. Census Bureau, released January 13, 2012; Next release is February 10, 2012)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments UPDATED

  • Shipments of manufactured durable goods in December, up two of the last three months, increased $4.4 billion or 2.2 percent to $207.5 billion, revised from the previously published 2.1 percent increase. This followed a 0.2 percent November decrease.

  • In December, shipments increased in primary metals (8.7 percent), machinery (4.3 percent), fabricated metal products (1.3 percent), furniture and related products (1.3 percent), nonmetallic mineral products (1.1 percent), transportation equipment (0.9 percent), miscellaneous durable goods (0.4 percent), and electrical equipment, appliances, and components (0.2 percent). However, shipments decreased in wood products (-1.5 percent), and computers and electronic products (-0.6 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-12, CB12-24),” February 3, 2012; next release is March 5, 2012)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In December 2011, 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 down 0.8 percent from previous month.

  • A seasonally adjusted increase of price from November to December was registered in residential electric power (+0.9 percent), home heating oil and distillates (+0.7 percent), and liquefied petroleum gas (+0.2 percent). A decrease in price was registered in no. 2 diesel fuel (-3.8 percent), residential gas (-2.8 percent), and gasoline price (-2.3 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 12-0060,” released January 18, 2012; next release is February 16, 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 January for the 30th consecutive month, and the overall economy grew for the 32nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in January as the PMI registered 54.1 percent, an increase of 1 percentage point when compared to December's seasonally adjusted reading of 53.1 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 January were Inventories, +4.0 points increase to 49.5; New Orders +2.8 points increase to 57.6; Supplier Deliveries, +2.1 increase to 53.6; Production, -3.2 points decrease to 55.7; Employment, -0.5 points decrease to 54.3.

    U.S. Industries Reporting Growth in January 2012

    • Apparel, Leather & Allied Products
    • Petroleum & Coal Products
    • Machinery
    • Computer & Electronic Products
    • Transportation Equipment
    • Miscellaneous Manufacturing
    • Fabricated Metal Products
    • Paper Products
    • Primary Metals

    (Institute for Supply Management, data released February 1, 2012; next release is March 1, 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