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Manufacturing Biweekly Update

March 4, 2011 [past updates]


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


Biweekly Notes

Factory Orders Surge 3.1%, Led by Jump in Aircraft Sales

New orders received by U.S. factories leaped 3.1 percent in January, marking their biggest increase since September 2006 on a massive surge in aircraft orders as the manufacturing outlook signaled a continuing improvement. The Commerce Department said on Friday that the increase in factory orders to $445.6 billion in January compared to an upwardly revised 1.4 percent increase in December. The January increase outstripped consensus forecasts for a 2.0 percent rise from analysts polled by Reuters after December's orders were originally reported as just a 0.2 percent gain. Excluding the volatile transportation category, January factory orders rose 0.7 percent, a sixth successive monthly pickup in orders excluding transport products. But again, this category was well ahead of expectations as economists forecast a 3.6 percent decline in January.

(Reuters |CNBC |March 4, 2011)
cnbc.com

Manufacturing in U.S. Probably Grew at Fastest Pace Since 2004

Manufacturing in the U.S. probably grew in February at the fastest pace in almost seven years, indicating factories are providing more momentum for the expansion, economists said before a report today. The Institute for Supply Management’s factory index rose last month to 61, the highest since May 2004, from January’s 60.8, according to the median estimate in a Bloomberg News survey. Readings greater than 50 signal growth. Other data may show construction spending fell 0.4 percent in January.

(Bloomberg |March 1, 2011)
bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In February 2011, average hourly earnings in manufacturing were $18.94, up 0.11 percent from January 2011’s $18.92 (preliminary), and up 2.49 percent from February 2010’s $18.48.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0271,” released March 4, 2011; next release is April 1, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly) updated

  • In the fourth-quarter of 2010, hourly compensation from previous quarter, annual rate (revised) was up 3.1 percent in total manufacturing, up 3.0 percent in durable manufacturing and up 2.9 percent in nondurable manufacturing.

  • In the fourth-quarter of 2010, hourly compensation of all manufacturing workers increased 1.5 percent, compared to a 5.2 percent increase during the fourth-quarter of 2009. Real hourly compensation in the total manufacturing sector increased 0.3 percent in the fourth-quarter of 2010, compared to 3.6 percent increase in the fourth-quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth Quarter and Annual Averages 2010, Revised,” USDL 11-0270, released March 3, 2011; next release is May 5, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • 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 March 25, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_3rd.pdf

       

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Manufacturing Employment updated

  • In February 2011, manufacturing employment went up, with an increase of 33,000 jobs.

  • In February, durable goods manufacturing gained 30,000 jobs with increase in machinery (9,200), fabricated metal products (6,800), primary metals (3,500), transportation equipment (3,400), wood products (3,100), nonmetallic mineral products (1,900), computer and electronic products (1,300), miscellaneous manufacturing (1,000), and electrical equipment and appliances (200). Meanwhile, furniture and related products lost 600 jobs.

  • In February, the employment level in nondurable goods manufacturing sector gained 3000 jobs, with increases in food manufacturing (3,700), beverages and tobacco products (1,700), leather and allied products (800), petroleum and coal products (800), textile mills (600), chemicals (600), paper and paper products (400), and textile product mills (200). Meanwhile, job lost occurred in printing and related support activities (-2,300), plastics and rubber products (-2,100), and apparel (-1,200).

  • 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-11-0271,” released March 4, 2011; next release is April 1, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In January 2011, manufacturing production was up 0.3 percent from previous month and was 5.5 percent above its year-earlier level.

  • Production of durable goods was up 0.6 percent from the previous month. The durable industries that registered increases in output included motor vehicles and parts (3.2 percent), machinery (1.3 percent), computer and electronic products (0.9 percent), aerospace and miscellaneous transportation equipment (0.7 percent), Furniture and related products (0.4 percent), fabricated metal products (0.3 percent),and miscellaneous (0.2 percent). The durable industries that registered decreases in output included wood products (-1.3 percent), nonmetallic mineral products (-1.0 percent), electrical equip., appliances, and components (-1.0 percent), and primary metal (-0.9 percent).

  • Production of nondurable goods was down 0.1 percent from previous month. The nondurable manufacturing industries that registered increases in output included apparel and leather (1.2 percent), plastics and rubber products (0.6 percent), chemical (0.1 percent), and paper (0.1 percent). The nondurable industries that registered decreases in output included petroleum and coal products (-1.0 percent), printing and support (-0.8 percent), textile and product mills (-0.4 percent), and food, beverage, and tobacco products (-0.3 percent).

  • Other manufacturing industries (non-NAICS) was up 0.3 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released February 16, 2011; next release is March 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In January 2011, manufacturing industries (NAICS based) operated at 74.0 percent of capacity, 4.9 percentage points below their 1972-2009 average of 78.9 percent and 0.1 percent points higher than their revised capacity utilization level in December 2010.

  • In January 2011, durable manufacturing, capacity utilization operated at 71.9 percent capacity, up 0.4 points from previous month (revised). Increased capacity utilization was registered in motor vehicles and parts (1.7 points), machinery (1.1 points), aerospace and miscellaneous transportation equipment (0.5 points), computer and electronic products (0.4 points), fabricated metal products (0.3 points), furniture and related products (0.3 points), and miscellaneous (0.2 points). Decreased capacity utilization was registered in electrical equip., appliances, and components (-0.8 points), primary metal (-0.7 points), wood products (-0.6 points), and nonmetallic mineral products (-0.4 points).

  • In January 2011, non-durable manufacturing, capacity utilization decreased 0.2 percentage points in from previous month (revised) to 76.6 percent. Increased capacity utilization was registered in apparel and leather (0.9 points) and plastics and rubber products (0.5 points). There was no change in paper and chemical. Decreased capacity utilization was registered in petroleum and coal products (-0.9 points) printing and support (-0.6 points), food, beverage, and tobacco products (-0.5 points), and textile and product mills (-0.4 points).

  • The index for other manufacturing industries (non-NAICS) increased 0.2 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released February 16, 2011; next release is March 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity updated

  • Manufacturing sector productivity (revised) rose 5.9 percent in the fourth-quarter of 2010, as output increased 4.4 percent and hours decreased 1.4 percent. Productivity was up 4.8 percent in the durable goods industries and up 8.0 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 2.7 percent in the fourth-quarter of 2010 and fell 2.7 percent over the last four quarters.

  • In durable goods industries, productivity (revised) was up 4.8 percent from previous quarter, as output increased 4.7 percent, while hours worked remained the same.

  • In nondurable goods industries, productivity (revised) was up 8.0 percent from previous quarter, as output increased 4.0 percent, while hours worked decreased 3.7 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Fourth-Quarter and Annual Averages 2010, Revised,” USDL 11-0270, released March 3, 2011; next release is May 5, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in December were 4.3 percent higher than the previous month. Imports were down 5.0 percent.

  • Year to date December 2010, U.S. manufactured goods exports accounted for 80.1 percent of all U.S. exports of goods, compared with 81.4 percent a year ago.

  • The year to date December 2010 trade deficit in manufactured goods of $415.7 billion was $89.4 billion more when compared with $326.2 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB11-26, BEA11-04, FT-900(10-12),” released February 11, 2011; next release is March 10, 2011)
    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 January, up four of the last five months, increased $0.7 billion or 0.3 percent to $202.8 billion, unchanged from the previously published increase. This followed a 2.3 percent December increase.

  • In January, shipments increased in primary metals (4.4 percent), miscellaneous durable goods (2.9 percent), computers and electronic products (2.7 percent), nonmetallic mineral products (2.5 percent), furniture and related products (1.7 percent), electrical equipment, appliances, and components (1.1 percent), and fabricated metal products (0.1 percent). Shipments decreased in machinery (-6.4 percent), transportation equipment (-0.4 percent), and wood products (-0.5 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-01, CB11-43),” March 4, 2011; next release is March 31, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In January 2011, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.5 percent compared to previous month.

  • The index for finished energy goods was up 1.8 percent from previous month.

  • A seasonally adjusted increase of price from December to January was registered in no. 2 diesel fuel (7.2 percent), gasoline price (6.9 percent), and home heating oil and distillates (1.2 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-1.9 percent), liquefied petroleum gas (-1.2 percent), and residential electric power (-1.1 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0202,” released February 16, 2011; next release is March 16, 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 February for the 19th consecutive month, and the overall economy grew for the 21st consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its rapid growth in February as the PMI registered 61.4 percent, an increase of 0.6 percentage point when compared to January's reading of 60.8 percent. This is also the highest PMI reading since May 2004 when the index also registered 61.4 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 February were: Employment increased 2.8 points to 64.5, Production increased 2.8 points to 66.3, Supplier Deliveries increased 0.8 points to 59.4, and New Orders increased 0.2 points to 68.0. Meanwhile, Inventories decreased 3.6 points to 48.8.

    U.S. Industries Reporting Growth in February 2011

    • Apparel, Leather & Allied Products
    • Petroleum & Coal Products
    • Transportation Equipment
    • Electrical Equipment, Appliances & Components
    • Machinery
    • Chemical Products
    • Fabricated Metal Products
    • Computer & Electronic Products
    • Textile Mills
    • Food, Beverage & Tobacco Products
    • Printing & Related Support Activities
    • Paper Products
    • Wood Products
    • Miscellaneous Manufacturing

    (Institute for Supply Management, data released March 1, 2011; next release is April 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