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Manufacturing Biweekly Update

May 27, 2011 [past updates]


U.S. Manufacturing Trends Current Period Year-to-Date
Wage Rates No Change up
Profits down up
Employment up up
Production down up
Capacity Utilization down up
Productivity up up
Exports up up
Goods Shipments up up


Biweekly Notes

Durable goods orders drop by largest amount in 6 months, reflecting widespread declines

Businesses cut back on their orders for heavy machinery, computers, autos and airplanes in April, reducing demand for long-lasting manufactured goods by the largest amount in six months. Orders for durable goods fell 3.6 percent, and a key category that serves as a proxy for business investment was down 2.8 percent, the Commerce Department reported Wednesday. The weakness was widespread across a number of industries as the impact of supply disruptions stemming from the Japanese earthquake in March rippled through U.S. manufacturing. Demand for autos, auto parts, steel, computers and electronic equipment all fell, and those declines were attributed in part to difficulty in getting critical component parts from Japan, where manufacturing has been disrupted by the March 11 earthquake and tsunami and nuclear plant disaster.
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(AP| Washington Post| May 25, 2011)

US factory output falls for the first time in 10 months

US factories produced fewer goods for the first time in 10 months, driven mainly by a slump in vehicle production as a result of a shortage in parts from Japan. Manufacturing in April fell 0.4% from the previous month, according to data released by the Federal Reserve. The number of vehicles manufactured declined from an annual rate of nine million units in March to 7.9 million. If car plant output is excluded from the data, factory output rose 0.2%. Total industrial production is 5% up on a year ago, boosted by the mining and utility industries which performed well. The sectors saw productivity rates rise 0.8% and 1.7% respectively during April. However, statistics showed that consumer goods production fell 0.7% because of a fall in the output of durable goods, which include cars, appliances, furniture and carpeting. The trend for fewer domestic goods only added to evidence of a decline in the US housing market. Newly released data by the Commerce Department showed that the number of new homes built in April plummeted 10.6% on the previous month.
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(BBC |May 17, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In April 2011, average hourly earnings in manufacturing were $18.90 (preliminary), no change from previous month, and up 2.11 percent from April 2010’s $18.51.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0622,” released May 6, 2011; next release is June 3, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the first-quarter of 2011, hourly compensation from previous quarter, annual rate (preliminary) was up 2.6 percent in total manufacturing, up 2.4 percent in durable manufacturing and up 2.2 percent in nondurable manufacturing.

  • In the first-quarter of 2011, hourly compensation of all manufacturing workers increased 3.1 percent, compared to a 2.8 percent increase during the first-quarter of 2010. Real hourly compensation in the total manufacturing sector increased 0.9 percent in the first-quarter of 2011, compared to 0.4 percent increase in the first-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2011, Preliminary,” USDL 11-0621, released May 5, 2011; next release is June 2, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits updated

  • In the fourth quarter of 2010, manufacturing profits decreased 10.3 percent, or $27.7 billion, to $241.5 billion from $269.2 billion in the third quarter. Compared with fourth quarter profits of 2009, manufacturing profits were up $70.6 billion in the fourth quarter of 2010. (NOTE: The manufacturing profits for first quarter 2011 will be updated in the next release)

  • First quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $126.9 billion from the fourth quarter of 2010 to $1012.3 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 11-22,” released May 26, 2011; next release is June 24, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp4q10_3rd.pdf

       

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Manufacturing Employment

  • In April 2011, manufacturing employment went up, with an increase of 29,000 jobs.

  • In April, durable goods manufacturing gained 19,000 jobs with increase in machinery (5,200), fabricated metal products (5,100), transportation equipment (4,300), primary metals (4,100), computer and electronic products (4,000), nonmetallic mineral products (700), and electrical equipment and appliances (400). Meanwhile, job losses occurred in wood products (-1,900), miscellaneous manufacturing (-1,600), and furniture and related products (-1,600).

  • In April, the employment level in nondurable goods manufacturing sector gained 10,000 jobs with increase in food manufacturing (7,200), chemicals (2,200), beverages and tobacco products (1,300), textile mills (600), paper and paper products (500), and petroleum and coal products (200). Meanwhile, job losses occurred in plastics and rubber products (-1,100), printing and related support activities (-600), textile product mills (-300), and apparel (-100). Meanwhile, leather and allied products remained unchanged.

  • 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-11-0622,” released May 6, 2011; next release is June 3, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production updated

  • In April 2011, manufacturing production was down 0.4 percent from previous month and was 4.6 percent above its year-earlier level.

  • Production of durable goods was down 1.0 percent from the previous month. The durable industries that registered increases in output included aerospace and miscellaneous transportation equipment (1.3 percent), computer and electronic products (1.1 percent), nonmetallic mineral products (0.5 percent), fabricated metal products (0.4 percent), miscellaneous (0.3 percent), and machinery production (0.2 percent). The durable industries that registered decreases in output included motor vehicles and parts (-8.9 percent), electrical equip., appliances, and components (-2.3 percent), and primary metal (-1.8 percent), furniture and related products (-1.1 percent), and wood products (-0.4 percent).

  • Production of nondurable goods was up 0.1 percent from the previous month. The nondurable manufacturing industries that registered increases in output included textile and product mills (2.4 percent), printing and support (1.3 percent), apparel and leather (0.9 percent), chemicals (0.6 percent), plastics and rubber products (0.4 percent), and food, beverage, and tobacco products (0.3 percent). The nondurable industries that registered decreases in output included petroleum and coal products (-2.9 percent), and paper (-0.6 percent).

  • Other manufacturing industries (non-NAICS) was up 0.8 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released May 17, 2011; next release is June 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In April 2011, manufacturing industries (NAICS based) operated at 74.9 percent of capacity, 3.9 percentage points below their 1972-2010 average of 78.8 percent and 0.4 percent points lower than their revised capacity utilization level in March 2011.

  • In April 2011, durable manufacturing, capacity utilization operated at 72.6 percent capacity, down 0.8 points from previous month. Increased capacity utilization was registered in aerospace and miscellaneous transportation equipment (0.9 points), fabricated metal products (0.5 points), nonmetallic mineral products (0.4 points), computer and electronic products (0.3 points), machinery (0.1 points), and miscellaneous (0.1 points). Decreased capacity utilization was registered in motor vehicles and parts (-6.1 points), electrical equip., appliances, and components (-1.7 points), primary metals (-1.4 points), furniture and related products (-0.7 points), and wood products (-0.1 points).

  • In April 2011, non-durable manufacturing, capacity utilization remained the same at 77.4 percent. Increased capacity utilization was registered in textile and product mills (1.7 points), printing and support (0.8 points), apparel and leather (0.7 points), chemicals (0.5 points), plastics and rubber products (0.5 points), and food, beverage, and tobacco products (0.1 points). Decreased capacity utilization was registered in petroleum and coal products (-2.5 points), and paper (-0.4 points).

  • The index for other manufacturing industries (non-NAICS) increased 0.6 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released May 17, 2011; next release is June 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity (preliminary) rose 6.3 percent in the first-quarter of 2011, as output increased 9.7 percent and hours increased 3.3 percent. Productivity was up 9.8 percent in the durable goods industries and up 4.5 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 3.5 percent in the first-quarter of 2011 and fell 1.4 percent over the last four quarters.

  • In durable goods industries, productivity (preliminary) was up 9.8 percent from previous quarter, as output increased 16.4 percent, and hours worked increased 6.1 percent.

  • In nondurable goods industries, productivity (preliminary) was up 4.5 percent from previous quarter, as output increased 3.3 percent, while hours worked decreased 1.2 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, First-Quarter 2011, Preliminary,” USDL 11-0621, released May 5, 2011; next release is June 2, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in March were 21.4 percent higher than the previous month. Imports were up 15.6 percent.

  • Year to date March 2011, U.S. manufactured goods exports accounted for 76.9 percent of all U.S. exports of goods, compared with 80.4 percent a year ago.

  • The year to date March 2011 trade deficit in manufactured goods of $102.7 billion was $25.7 billion more when compared with $76.9 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB11-84, BEA11-22, FT-900(11-03),” released May 11, 2011; next release is June 9, 2011)
    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 March, up five consecutive months, increased $4.4 billion or 2.1 percent to $208.1 billion, revised from the previously published 1.8 percent increase. This followed a 0.6 percent February increase.

  • In March, shipments increased in machinery (4.3 percent), transportation equipment (3.4 percent), wood products (3.2 percent), primary metals (2.9 percent), furniture and related products (2.4 percent), fabricated metal products (2.0 percent), electrical equipment, appliances, and components (1.1 percent), miscellaneous durable goods (1.1 percent), and nonmetallic mineral products (0.9 percent). However, shipment decreased in computers and electronic products (-1.0 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-03, CB11-80),” May 3, 2011; next release is June 2, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In April 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 up 2.5 percent from previous month.

  • A seasonally adjusted increase of price from March to April was registered in liquefied petroleum gas (4.5 percent), home heating oil and distillates (3.9 percent), gasoline price (3.6 percent), no. 2 diesel fuel (3.5 percent), residential gas (3.5 percent), and residential electric power (0.4 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0680,” released May 12, 2011; next release is June 14, 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 April for the 21st consecutive month, and the overall economy grew for the 23rd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its rapid growth in April as the PMI registered 60.4 percent, a decrease of 0.8 percentage point when compared to March's reading of 61.2 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 April were: Inventories, 6.2 points increase to 53.6; Production, 5.2 points decrease to 63.8; Supplier Deliveries, 2.9 points decrease to 60.2; New Orders, 1.6 points decrease to 61.7; and Employment, 0.3 points decrease to 62.7.

    U.S. Industries Reporting Growth in April 2011

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

    (Institute for Supply Management, data released May 2, 2011; next release is June 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