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Manufacturing Biweekly Update

June 25, 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 down up


Biweekly Notes

U.S. Durables Orders Indicate Manufacturing Boost to Recovery

Orders for durable goods excluding transportation rose in May for the third time in four months, indicating U.S. manufacturing will help maintain the recovery. The 0.9 percent increase in bookings for goods meant to last at least three years, excluding autos and aircraft, followed a 0.8 percent decrease in April, figures from the Commerce Department showed today in Washington. Total orders dropped for the first time in six months as demand for planes retreated. Shipments of those items, used in calculating gross domestic product, increased 1.6 percent after no change in April. Demand in May increased for computers and related products, primary metals and machinery, today’s report showed. Orders excluding defense equipment decreased 1.1 percent, the first decline in the last nine months. Bookings for military capital goods fell 3 percent.

(Bloomberg| June 24, 2010)
www.bloomberg.com

Industrial Production in U.S. Rose 1.2% in May, Led by Autos

Production in the U.S. rose in May by the most since August, led by increases in automobiles and utilities and showing manufacturers are weathering the effects of the European debt crisis. Output at factories, mines and utilities increased 1.2 percent last month after a 0.7 percent gain in April, figures from the Federal Reserve in Washington showed today. Plant use increased to the highest level since October 2008. Manufacturers are leading the recovery from the worst recession since the 1930s as they replenish inventories, sell more goods abroad and invest in new equipment. A lack of inflation means the Fed has scope to keep the target interest rate near zero in coming months to spur growth.

(Bloomberg | June 16, 2010)
www.bloomberg.com


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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • 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)

  • 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 updated

  • In the first quarter of 2010, manufacturing profits increased 29.4 percent, or $47.2 billion, to $207.7 billion from $160.5 billion in the third quarter. Compared with first quarter profits of 2009, manufacturing profits were up $86.1 billion in the first quarter of 2010.

  • First quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 20.6 percent from the fourth quarter of 2009 to $1027.1 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-31,”released June 25, 2010; next release is July 30, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp1q10_3rd.pdf

       

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Manufacturing Employment

  • 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 updated

  • In May 2010, manufacturing production was up 0.9 percent from previous month and was 7.9 percent above its year-earlier level.

  • Production of durable goods was up 1.7 percent from previous month. The durable manufacturing industry that registered increases in output Motor vehicles and parts (5.5 percent), wood products (3.7 percent), furniture and related products (2.4 percent), primary metal (2.3 percent), machinery (2.0 percent), fabricated metal products (1.9 percent), computer and electronic products (1.4 percent), miscellaneous (1.3 percent), and nonmetallic mineral product (0.4 percent). The durable industry that registered decreases in output included Electrical equip., appliances, and components (-0.8 percent), and aerospace and miscellaneous transportation equipment (-0.8 percent).

  • The production of nondurable goods remained the same from previous month. The nondurable manufacturing industries that registered increases in output included Printing and support (1.7 percent), textile and product mills (1.4 percent), food, beverage, and tobacco products (1.0 percent), plastics and rubber products (0.9 percent), and paper (0.5 percent). The nondurable industry that registered decreases in output included petroleum and coal products (-2.2 percent), chemical (-0.8 percent), and apparel and leather (-0.2 percent).

  • The index for other manufacturing industries (non-NAICS) was up 1.8 percent from previous month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released June 16, 2010; next release is July 15, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In May 2010, manufacturing industries (NAICS based) operated at 71.9 percent of capacity, 7.1 percentage points below their 1972-2009 average of 79.0 percent and 0.7 percent points higher than their revised capacity utilization level in April 2010.

  • In durable manufacturing, capacity utilization increased 1.2 percentage points in May from April (revised) to 66.3 percent. Increased capacity utilization was registered in motor vehicles and parts (3.1 points), wood products (2.2 points), furniture and related products (1.8 points), primary metal (1.6 points), fabricated metal products (1.5 points), machinery (1.3 points), computer and electronic products (0.9 points), miscellaneous (0.7 points), and nonmetallic mineral products (0.1 points). Decreased capacity utilization was registered in aerospace and miscellaneous transportation equipment (-0.6 points), and electrical equip., appliances, and components (-0.5 points).

  • In non-durable manufacturing, capacity utilization increased 0.1 percentage points in May from April (revised) to 77.8 percent. Increased capacity utilization was registered in printing and support (1.4 points), textile and product mills (1.3 points), plastics and rubber products (1.0 points), food, beverage, and tobacco products (0.7 points), paper (0.5 points), and apparel and leather (0.2 points). Decreased capacity utilization was registered in petroleum and coal products (-1.9 points), and chemical (-0.6 points).

  • The index for other manufacturing industries (non-NAICS) increased 1.1 points from last month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released June 16, 2010; next release is July 15, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • 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

  • 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 updated

  • Shipments of manufactured durable goods in May, down following two consecutive monthly increases, decreased $0.8 billion or 0.4 percent to $196.0 billion. This followed a 1.8 percent April increase. Transportation equipment, down following two consecutive monthly increases, had the largest decrease, $1.3 billion or 2.8 percent to $47.1 billion.

  • In May, shipments increased in machinery (3.2 percent), fabricated metal products (1.2 percent), and primary metals (1.0 percent), and electrical equipment, appliances, and components (0.3 percent). Shipment decreased in transportation equipment (-2.8 percent), and computer and electronic products (-2.6 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-05, CB10-94),”June 24, 2010; next release is July 28, 2010)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In May 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 1.5 percent from previous month.

  • A seasonally adjusted decrease of price from April to May was registered in home heating oil and distillates (-7.4 percent), gasoline price (-7.0 percent), liquefied petroleum gas (-2.7 percent), residential gas (-1.1 percent), No. 2 diesel fuel (-0.9 percent). A seasonally adjusted increase of price was registered in residential electric power (0.3 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 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