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Manufacturing Biweekly Update

June 11, 2010 [past updates]


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


Biweekly Notes

Manufacturing expands for 10th straight month

Manufacturing grew for a 10th straight month in May and construction spending notched its fastest pace in nearly 10 years in April, suggesting the U.S. economy will add jobs and weather Europe's debt storm. While the expansion in manufacturing was a touch slower than the prior month, the report on Tuesday showed underlying strength in the sector with the employment measure touching its highest in six years. The Institute for Supply Management's index of national factory activity slipped to 59.7 from 60.4 in April, but was above market expectations for 59.0. A reading above 50 indicates expansion in the sector. Export orders were the highest since December 1988. Separately, construction spending in April rose 2.7 percent, the biggest advance since August 2000, from a gain of 0.4 percent in March, a Commerce Department report showed. That was well above market expectations for a flat reading and gains were broad-based.

(Reuters| June 1, 2010)
www.reuters.com

Exports declined as U.S. trade gap widened in April

A picture of a steady but still sluggish economic recovery emerged from reports Thursday that showed fewer people were claiming unemployment aid while United States exports were slowing. The reports echo a suggestion this week from the Federal Reserve chairman, Ben S. Bernanke, that the rebound will remain intact despite high unemployment, a fragile housing market and Europe’s debt crisis. But it will take time to create enough jobs to bring down the 9.7 percent unemployment rate. The trade deficit widened to $40.3 billion in April, up 0.75 percent from March. Exports dropped 0.7 percent while imports declined by 0.4 percent. For April, exports slipped to $148.8 billion; demand for farm products fell by $647 million and weakness spread across a number of manufactured goods, from electric generators to industrial machinery and aircraft engines. Imports edged down to $189.1 billion. Demand for oil was basically unchanged from March, while total consumer goods imports dipped by $741 million, with the biggest decline coming in pharmaceutical products.

(AP| New York Times| June 10, 2010)
www.nytimes.com


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U.S. Manufacturing Key Facts

Manufacturing Wage Rates udpated

  • In May 2010, average hourly earnings in manufacturing were $18.57 (preliminary), up 0.38 percent from April 2010’s $18.50 (preliminary), and up 2.31 percent from May 2009’s $18.15.

    (BLS/DOL Employment data from “The Employment Situation, USDL 10-0748,” released June 4, 2010; next release is July 2, 2010)
    http://www.bls.gov/news.release/pdf/empsit.pdf

Manufacturing Wage Rates (Quarterly, Yearly) updated

  • During the first quarter of 2010, hourly compensation from previous quarter, annual rate remained the same in total manufacturing, down 0.4 percent in durable manufacturing and up 0.3 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 1.5 percent in the fourth quarter, and decreased 0.7 percent (revised) in the annual rate of 2009.

  • In the first quarter of 2010, hourly compensation of all manufacturing workers grew 1.8 percent (revised), compared to a 5.4 percent increase during the first quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 0.6 percent (revised) in the first quarter of 2010, compared to 5.5 percent increase in the first quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2010, Revised,” USDL 10-0747, released June 3, 2010; next release is August 10, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Profits

  • 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 updated

  • In May, 2010, manufacturing employment went up, with an increase of 29,000.

  • In May, durable goods manufacturing gained 34,000 jobs, with increases in fabricated metal products (10,400), transportation equipment (9,000), machinery (5,700), primary metals (2,800), computer and electronic products (2,800), nonmetallic mineral products (2,300), electrical equipment and appliances (1,300), and wood products (1000). Job losses occurred in miscellaneous manufacturing (-900), and furniture and related products (-700).

  • Nondurable goods manufacturing lost 5,000 jobs with decreases in food manufacturing (-2,100), apparel (-1,500), beverages and tobacco products (-1,200), petroleum and coal products (-1,100), chemicals (-1,100), printing and related support activities (-900), and textile mills (-500). However, job gains occurred in plastics and rubber products (2,600), leather and allied products (500), textile product mills (300), and paper and paper products (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 10-0748,” released June 4, 2010; next release is July 2, 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 updated

  • Manufacturing sector productivity (revised) rose 1.5 percent in the first quarter of 2010, as output increased 7.2 percent and hours increased 5.6 percent. Productivity grew 3.0 percent in the durable goods industries and 0.9 percent in the nondurable goods industries. Unit labor costs in manufacturing declined 1.5 percent in the first quarter of 2010 and fell 5.1 percent over the last four quarters

  • In durable goods industries, productivity (revised) grew 3.0 percent from previous quarter, annual rate in the first quarter of 2010, as output increased 10.2 percent, while hours worked also increased 7.0 percent.

  • In nondurable goods industries, productivity (revised) grew 0.9 percent from previous quarter, annual rate in the first quarter of 2010, as output increased 4.4 percent, while hours worked also increased 3.4 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2010 Revised,” USDL 10-0747, released June 3, 2010; next release is August 10, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade updated

  • Year to date April 2010, U.S. manufactured goods exports accounted for 80.4 percent of all U.S. exports of goods, compared with 82.1 percent a year ago.

  • Manufactured goods exports in March were 7.8 percent lower than the previous month. Imports were down 4.6 percent.

  • The year to date April 2010 trade deficit in manufactured goods of $105.7 billion was $10.1 billion more when compared with $95.6 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-78, BEA10-25, FT-900(10-04),” released June 10, 2010; next release is July 13, 2010)
    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 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

  • 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  updated

  • Economic activity in the manufacturing sector expanded in May for the 10th consecutive month, and the overall economy grew for the 13th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in May as the PMI registered 59.7 percent, a decrease of 0.7 percentage point when compared to April's reading of 60.4 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 May were: Employment up 1.3 points to 59.8, Inventories down 3.8 points to 45.6, Production decreased 0.3 points to 66.6, and Supplier Deliveries down 0.3 points to 61.0. New Orders remain the same at 65.7.

    U.S. Industries Reporting Growth in May 2010

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

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