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Manufacturing Biweekly Update

May 28, 2010 [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 up up
Exports up up
Goods Shipments up up


Biweekly Notes

April factory orders rise on demand for aircraft

A rebound in demand for commercial aircraft lifted April orders for big-ticket goods, further evidence that manufacturers are helping to drive the economic recovery. Requests for durable goods increased 2.9 percent last month, the Commerce Department said Wednesday. It was the best showing in three months and more than double expectations. For April, the 2.9 percent rise in orders was led by a 228 percent surge in demand for commercial aircraft. The increase reflected strong demand for aircraft manufactured by Boeing Co. It also more than offset a 71.2 percent plunge in March in this highly volatile category. Orders for motor vehicles were up 1.6 percent following an even stronger 4.5 percent gain in March. Automakers continue to dig out of the deep downturn that hit their industry over the past two years. Total manufacturing orders rose 16.1 percent.

(AP| Washington Post| May 26, 2010)
Washingtonpost.com

Manufacturing in Philadelphia Region Expands in May

Manufacturing in the Philadelphia region expanded in May for a ninth straight month, another sign factories are leading the recovery. The Federal Reserve Bank of Philadelphia’s general economic index rose to 21.4 during the month from 20.2 in April. Readings above zero signal growth. A surge in exports, increased business investment and inventory rebuilding are sources of strength for manufacturing. Economists forecast the index would rise to 21.3, according to the median of 57 projections in a Bloomberg News survey. Estimates ranged from 15 to 25.

(Bloomberg| May 20, 2010)
bloomberg.com


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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In April 2010, average hourly earnings in manufacturing were $18.51 (preliminary), up 0.11 percent from March 2010’s $18.49 (preliminary), and up 1.98 percent from April 2009’s $18.15.

    (BLS/DOL Employment data from “The Employment Situation, USDL 10-0589,” released May 7, 2010; next release is June 4, 2010)
    http://www.bls.gov/news.release/pdf/empsit.pdf

Manufacturing Wage Rates (Quarterly, Yearly)

  • During the first quarter of 2010, hourly compensation from previous quarter, annual rate (preliminary) was down 1.2 percent in total manufacturing, down 1.2 percent in durable manufacturing and down 1.5 percent in nondurable manufacturing.

  • When consumer prices were taken into account, real hourly compensation from previous quarter, annual rate (revised) of all manufacturing workers decreased 3.0 percent in the fourth quarter, and increased 4.8 percent (revised) in the annual average of 2009.

  • In the first quarter of 2010, hourly compensation of all manufacturing workers grew 0.9 percent (annual rate from the same quarter a year ago), compared to a 5.4 percent increase during the first quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 1.5 percent in the first quarter of 2010 (annual rate from the same quarter a year ago), compared to 5.5 percent increase in the first quarter of 2019.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2010, Preliminary,” USDL 10-0588, released March 6, 2010; next release is June 3, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Profits updated

  • In the fourth quarter of 2009, manufacturing profits increased 23.7 percent, or $30.8 billion, to $160.5 billion from $129.7 billion in the third quarter. Compared with third quarter profits of 2008, manufacturing profits were down $76.0 billion in the third quarter of 2009. (NOTE: The manufacturing profits for first quarter 2010 will be updated in the next release.)

  • First quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 16.5 percent from the fourth quarter of 2009 to $991.8 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-22,”released May 27, 2010; next release is June 25, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp1q10_2nd.pdf

       

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Manufacturing Employment

  • In April, 2010, manufacturing employment went up, with an increase of 44,000.

  • In April, durable goods manufacturing gained 30,000 jobs, with increases in all categories: fabricated metal products (8,600), machinery (7,400), primary metals (4,000), transportation equipment (3,700), wood products (3,000), electrical equipment and appliances (2,500), nonmetallic mineral product (500), miscellaneous manufacturing (400), Computer and electronic products (100), and Furniture and related products (100).

  • Nondurable goods manufacturing gained 14,000 jobs with increases in food manufacturing (5,400), plastics and rubber products (3,900), paper and paper products (2,200), petroleum and coal products (1,800), printing and related support activities (1,100), textile mills (800), beverages and tobacco products (300), textile product mills (100), and apparel (100). However, job losses occurred in chemicals (-1,300), and leather and allied products (-1,000).

  • 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 10-0589,” released May 7, 2010; next release is June 4, 2010)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In April 2010, manufacturing production was up 1.0 percent from previous month and was 6.0 percent above its year-earlier level.

  • Production of durable goods was up 1.1 percent from previous month. The durable manufacturing industry that registered increases in output included nonmetallic mineral products (3.5 percent), machinery (2.6 percent), electrical equip., appliances and components (2.6 percent), primary metal (2.4 percent), miscellaneous (1.9 percent), fabricated metal products (1.7 percent), computer and electronic products (0.8 percent), wood products (0.7 percent), and furniture and related products (0.3 percent). The durable manufacturing industry that registered decreases in output included motor vehicles and parts (-2.2 percent), and aerospace and miscellaneous transportation equipment (-0.8 percent).

  • The production of nondurable goods increased 1.0 percent from previous month. The nondurable manufacturing industries that registered increases in output included petroleum and coal products (3.6 percent), plastics and rubber products (2.7 percent), paper (2.4 percent), textile and product mills (1.1 percent), printing and support (1.1 percent), chemical (0.6 percent), and food, beverage, and tobacco products (0.1 percent). There was no change in apparel and leather.

  • The index for other manufacturing industries (non-NAICS) was up 0.4 percent from previous month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released May 14, 2010; next release is June 16, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In April 2010, manufacturing industries (NAICS based) operated at 71.2 percent of capacity, 7.8 percentage points below their 1972-2009 average of 79.0 percent and 0.8 percent points higher than their revised capacity utilization level in March 2010.

  • In durable manufacturing, capacity utilization increased 0.8 percentage points in April from March (revised) to 64.9 percent. Increased capacity utilization was registered in electrical equip., appliances, and components (2.1 points), nonmetallic mineral products (1.9 points), machinery (1.7 points), primary metal (1.6 points), fabricated metal products (1.3 points), miscellaneous (1.1 points), wood products (0.6 points), furniture and related products (0.6 points), and computer and electronic products (0.5 points). Decreased capacity utilization was registered motor vehicles and parts (-1.1 points), and aerospace and miscellaneous transportation equipment (-0.6 points).

  • In non-durable manufacturing, capacity utilization increased 0.9 percentage points in April from March (revised) to 78.1 percent. Increased capacity utilization was registered in petroleum and coal products (3.0 points), plastics and rubber products (2.3 points), paper (2.0 points), textile and product mills (1.1 points), printing and support (1.0 points), apparel and leather (0.4 points), chemical (0.4 points). There was no change in food, beverage, and tobacco products.

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

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released May 14, 2010; next release is June 16, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity (preliminary) rose 2.5 percent in the first quarter of 2010, as output increased 7.5 percent and hours increased 4.9 percent. Productivity grew 3.8 percent in the durable goods industries and 2.2 percent in the nondurable goods industries. Over the last four quarters, manufacturing productivity increased 7.5 percent as output increased 3.3 percent and hours worked fell 3.9 percent. Unit labor costs in manufacturing declined 3.7 percent in the first quarter of 2010 and decreased 6.1 percent over the last four quarters.

  • In durable goods industries, productivity (preliminary) grew 3.8 percent from previous quarter, annual rate in the first quarter of 2010, as output increased 10.5 percent, while hours worked also increased 6.4 percent.

  • In nondurable goods industries, productivity (preliminary) grew 2.2 percent from previous quarter, annual rate in the first quarter of 2010, as output increased 4.8 percent, while hours worked also increased 2.5 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2010 Preliminary,” USDL 10-0588, released May 6, 2009; next release is June 3, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Year to date March 2010, U.S. manufactured goods exports accounted for 80.5 percent of all U.S. exports of goods, compared with 82.1 percent a year ago. Manufactured goods exports in March were 18.5 percent higher than the previous month. Imports were up 16.8 percent. The year to date March 2010 trade deficit in manufactured goods of $76.9 billion was $6.5 billion more when compared with $70.4 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-65, BEA10-20, FT-900(10-03),” released May 12, 2010; next release is June 10, 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 April, up two consecutive months, increased $2.7 billion or 1.4 percent to $196.0 billion. This followed a 2.1 percent March increase.

  • In April, shipments increased in computer and electronic products (8.1 percent over March), electrical equipment, appliances, and components (1.9 percent), fabricated metal products (1.1 percent),and transportation equipment (0.2 percent). Shipment decreased in machinery (-3.0 percent),and primary metals (-0.2 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-04, CB10-74),”May 26, 2010; next release is June 24, 2010)
    http://www.census.gov/indicator/www/m3/adv/pdf/durgd.pdf

       

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Manufactured Goods Prices updated

  • In April 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.2 percent compared to previous month

  • The index for finished energy goods was down 0.8 percent from previous month.

  • A seasonally adjusted decrease of price from March to April was registered in liquefied petroleum gas (-5.8 percent), gasoline price (-2.7 percent), and residential gas (-1.3 percent). A seasonally adjusted increase of price was registered in home heating oil and distillates (5.2 percent), No. 2 diesel fuel (2.8 percent), and residential electric power (1.2 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-0684,” released May 18, 2010; next release is June 16, 2010)
    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 ninth consecutive month, and the overall economy grew for the 12th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in April with the rate of growth accelerating as the PMI registered 60.4 percent, an increase of 0.8 percentage point when compared to March's reading of 59.6 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: New Orders up 4.2 points to 65.7, Production up 5.8 points to 66.9, Employment up 3.4 points to 58.5, Supplier Deliveries down 3.6 points to 61.3, and Inventories down 5.9 points to 49.4.

    U.S. Industries Reporting Growth in April 2010

    • Apparel, Leather & Allied Products
    • Nonmetallic Mineral Products
    • Wood Products
    • Petroleum & Coal Products
    • Plastics & Rubber Products
    • Fabricated Metal Products
    • Electrical Equipment, Appliances & Components
    • Miscellaneous Manufacturing
    • Transportation Equipment
    • Machinery
    • Computer & Electronic Products
    • Primary Metals
    • Furniture & Related Products
    • Chemical Products
    • Printing & Related Support Activities
    • Paper Products
    • Food, Beverage & Tobacco Products
      (Note: No industries are reporting contraction in April.)

    (Institute for Supply Management data released May 3, 2010; next release is June 1, 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