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Manufacturing Biweekly Update

June 24, 2011 [past updates]


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


Biweekly Notes

Durable goods orders rebound in May

Businesses boosted their orders for machinery, electronics products and airplanes in May. The pickup suggests manufacturing is rebounding after the Japan crises made parts scarce and slowed production of some factory goods temporarily. Orders for long-lasting manufactured products increased 1.9 percent in last month, the Commerce Department said Friday. A key category that signals business investment plans rose 1.6 percent. The stronger demand follows a revised 2.7 percent decline in April that was largely the result of supply disruptions caused by Japan's March 11th earthquake and tsunami. The inability to get critical component parts in such industries as autos and electronics slowed U.S. manufacturing. Orders for autos and auto parts rose 0.6 percent in May after having fallen 5.3 percent in April. The rebound in May in both autos and broader categories supports the view that the April lull was temporary.
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(AP| Yahoo! Finance| June 24, 2011)

Housing, Jobs Remain Key Drag On US Growth In 2011 -Fannie Mae

Growth prospects heading into the second half of the year have dimmed amid broad downward trends in sectors spanning the U.S. economy, according to a monthly economic outlook report from Fannie Mae. While the sectors affected include housing, manufacturing and consumer spending, the housing market remains a chief drag on economic growth, said Fannie Mae economists. They said persistently high inventory levels continue to push home prices lower. Any flattening of the downward spiral of U.S. home prices isn't likely until the end of 2011, economists add. "Ultimately, the labor market holds the key to a housing recovery, but job growth is needed in order to activate housing demand," said Fannie Mae Chief Economist Doug Duncan. For the full year, Fannie Mae economists now see economic growth coming in at 2.5%, down from a previous forecast of 2.9% and more than a full percentage point lower than the growth figure seen at the beginning of the year.
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(Dow Jones Newswires |Nasdaq.com |June 21, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In May 2011, average hourly earnings in manufacturing were $18.93 (preliminary), up 0.11 percent from previous month, and up 1.83 percent from May 2010’s $18.59.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-0809,” released June 3 2011; next release is July 8, 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 (revised) was up 2.8 percent in total manufacturing, up 2.9 percent in durable manufacturing and up 2.1 percent in nondurable manufacturing.

  • In the first-quarter of 2011, hourly compensation of all manufacturing workers increased 3.4 percent (revised), compared to a 2.8 percent increase during the first-quarter of 2010. Real hourly compensation in the total manufacturing sector increased 1.1 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, Revised,” USDL 11-0808, released June 2, 2011; next release is August 9, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits updated

  • In the firsts quarter of 2011, manufacturing profits increased 16.2 percent, or $39.1 billion, to $280.6 billion from $241.5 billion in the fourth quarter. Compared with first quarter profits of 2010, manufacturing profits were up $30.2 billion in the first quarter of 2011.

  • First quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $142.1 billion (revised) from the fourth quarter of 2010 to $1027.5 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 11-32,” released June 24, 2011; next release is July 29, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp1q11_3rd.pdf

       

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Manufacturing Employment

  • In May 2011, manufacturing employment went down, with a decrease of 5,000 jobs.

  • In May, durable goods manufacturing gained 8,000 jobs with increase in fabricated metal products (6,500), machinery (5,500), primary metals (3,100), furniture and related products (2,200), nonmetallic mineral products (1,100), and miscellaneous manufacturing (700). Meanwhile, job losses occurred in transportation equipment (-8,800), wood products (-2,200), and computer and electronic products (-400). There was no change of employment in electrical equipment and appliances.

  • In May, the employment level in nondurable goods manufacturing sector lost 13,000 jobs with decreases in food manufacturing (-7,000), printing and related support activities (-4,300), paper and paper products (-2,500), chemicals (-800), petroleum and coal products (-600), textile product mills (-300), and leather and allied products (-300). Meanwhile, job gains occurred in beverages and tobacco products (1,300), plastics and rubber products (800), apparel (300), and textile mills (100).

  • 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-11-0809,” released June 3, 2011; next release is July 8, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production updated

  • In May 2011, manufacturing production was up 0.4 percent from previous month and was 3.7 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 furniture and related products (2.6 percent), nonmetallic mineral products (1.8 percent), machinery (1.7 percent), computer and electronic products (1.4 percent), aerospace and miscellaneous transportation equipment (1.0 percent), fabricated metal products (0.6 percent), and miscellaneous (0.5 percent). The durable industries that registered decreases in output included wood products (-1.8 percent), motor vehicles and parts (-1.5 percent), electrical equip., appliances, and components (-0.6 percent), and primary metal (-0.6 percent).

  • Production of nondurable goods was up 0.3 percent from the previous month. The nondurable manufacturing industries that registered increases in output included petroleum and coal products (2.0 percent), textile and product mills (1.4 percent), apparel and leather (0.8 percent), plastics and rubber products (0.6 percent), chemicals (0.4 percent), and paper (0.4 percent). The nondurable industries that registered decreases in output included printing and support (-0.5 percent), and food, beverage, and tobacco products (-0.4 percent).

  • Other manufacturing industries (non-NAICS) was up 0.7 percent.

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

       

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Manufacturing Capacity Utilization updated

  • In May 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 0.2 percent points higher than their revised capacity utilization level in April 2011.

  • In May 2011, durable manufacturing, capacity utilization operated at 72.8 percent capacity, up 0.3 points from previous month. Increased capacity utilization was registered in furniture and related products (1.9 points), machinery (1.3 points), nonmetallic mineral products (1.1 points), aerospace and miscellaneous transportation equipment (0.6 points), fabricated metal products (0.6 points), computer and electronic products (0.4 points), and miscellaneous (0.2 points). Decreased capacity utilization was registered in wood products (-1.0 points), motor vehicles and parts (-1.0 points), primary metals (-0.5 points), and electrical equip., appliances, and components (-0.4 points).

  • In May 2011, non-durable manufacturing, capacity utilization operated at 77.3 percent capacity up 0.2 points from previous month. Increased capacity utilization was registered in petroleum and coal products (1.6 points), textile and product mills (1.0 points), plastics and rubber products (0.7 points), apparel and leather (0.6 points), paper (0.4 points), and chemicals (0.3 points), Decreased capacity utilization was registered in food, beverage, and tobacco products (-0.5 points). and printing and support (-0.2 points).

  • The index for other manufacturing industries (non-NAICS) increased 0.5 points.

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

       

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Manufacturing Productivity

  • Manufacturing sector productivity (revised) rose 4.2 percent in the first-quarter of 2011, as output increased 7.7 percent and hours increased 3.3 percent. Productivity was up 7.5 percent in the durable goods industries and up 2.6 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased 1.4 percent in the first-quarter of 2011 and fell 0.7 percent over the last four quarters.

  • In durable goods industries, productivity (revised) was up 7.5 percent from previous quarter, as output increased 14.0 percent, and hours worked increased 6.1 percent.

  • In nondurable goods industries, productivity (revised) was up 2.6 percent from previous quarter, as output increased 1.5 percent, while hours worked decreased 1.1 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, First-Quarter 2011, Revised,” USDL 11-0808, released June 2, 2011; next release is August 9, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in April were 5.4 percent lower than the previous month. Imports were down 4.0 percent.

  • Year to date April 2011, U.S. manufactured goods exports accounted for 84.5 percent of all U.S. exports of goods, compared with 86.3 percent a year ago.

  • The year to date April 2011 trade deficit in manufactured goods of $133.2 billion was $28.3 billion more when compared with $104.9 billion a year ago.

    (Please note that the manufacturing trade numbers are now defined on a NAICS basis, so they will not be comparable with the prior figures.)

    (USA Trade Online, U.S. Census Bureau, June 9 data release. Next release is July 12, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in April, down following four consecutive monthly increases, decreased $2.5 billion or 1.3 percent to $194.4 billion, revised from the previously published 1.0 percent decrease. This followed a 3.1 percent March increase.

  • In April, shipments decreased in machinery (-4.3 percent), transportation equipment (-3.3 percent), electrical equipment, appliances, and components (-2.8 percent), furniture and related products (-1.8 percent), nonmetallic mineral products (-1.5 percent), fabricated metal products (-0.9 percent), primary metals (-0.2 percent), miscellaneous durable goods (-0.2 percent), and wood products (-0.1 percent). However, shipment increased in computers and electronic products (3.9 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-04, CB11-96),” June 2, 2011; next release is July 5, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In May 2011, 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 up 1.5 percent from previous month.

  • A seasonally adjusted increase of price from April to May was registered in liquefied petroleum gas (4.2 percent), gasoline price (2.7 percent), and residential electric power (0.9 percent), and residential gas (0.4 percent). Decrease of price from April to May was registered in no. 2 diesel fuel (-3.8 percent), and home heating oil and distillates (-3.5 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0889,” released June 14, 2011; next release is July 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 May for the 22nd consecutive month, and the overall economy grew for the 24th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in May as the PMI registered 53.5 percent, a decrease of 6.9 percentage points 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: New Orders, 10.7 points decrease to 51.0; Production, 9.8 points decrease to 54.0; Inventories, 4.9 points decrease to 48.7; Supplier Deliveries, 4.5 points decrease to 55.7; and Employment, 4.5 points decrease to 58.2.

    U.S. Industries Reporting Growth in may 2011

    • Nonmetallic Mineral Products
    • Petroleum & Coal Products
    • Machinery
    • Transportation Equipment
    • Computer & Electronic Products
    • Textile Mills
    • Electrical Equipment, Appliances & Components
    • Primary Metals
    • Miscellaneous Manufacturing
    • Paper Products
    • Chemical Products
    • Plastics & Rubber Products
    • Apparel, Leather & Allied Products
    • Fabricated Metal Products

    (Institute for Supply Management, data released June 1, 2011; next release is July 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