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Manufacturing Biweekly Update

July 6, 2012 [past updates]


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


Biweekly Notes

US manufacturing shrinks for first time in 3 years

U.S. manufacturing shrank in June for the first time in nearly three years, a troubling sign as evidence builds that economic growth is slowing. The Institute for Supply Management, a trade group of purchasing managers, said Monday that its index of manufacturing activity fell to 49.7. That's down from 53.5 in May and the lowest reading since July 2009, one month after the recession officially ended. Readings below 50 indicate contraction. Production fell to a three-year low and a measure of new orders plummeted by the most in more than a decade, suggesting the weakness will likely persist in the coming months.
(MSNBC| July 2, 2012)
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U.S. employment rolls edge up

The economy added a disappointing 80,000 jobs in June as the unemployment rate held steady at 8.2%, the U.S. Department of Labor reported today. Manufacturing added 11,000 jobs last month. Growth in the second quarter averaged 10,000 per month, the department announced, compared with an average of 41,000 per month during the first quarter of 2012. In June, employment increased in motor vehicles and parts (7,000) and in fabricated metal products (5,000). Calling it the "weakest recovery since the Great Depression," economist Peter Morici said "nearly the entire reduction in unemployment since October 2009 has been accomplished through a significant drop in the percentage of adults participating in the labor force-either working or looking for work." Warning that growth may be even slower in the second quarter, Morici said the economy is "dangerously close to stalling and falling into recession."
(Industry Week| July 6, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates UPDATED

  • In June 2012, average hourly earnings in manufacturing were $19.14 (preliminary), up 0.31 percent from previous month, and up 1.16 percent from June 2011’s $18.92.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-1332,” released July 6, 2012; next release is August 3, 2012)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the first-quarter of 2012, hourly compensation from previous quarter, annual rate (revised) was unchanged in total manufacturing, down (-0.6 percent) in durable manufacturing and up (+1.0 percent) in nondurable manufacturing.

  • In the first-quarter of 2012, hourly compensation (revised) of all manufacturing workers decreased (-0.7 percent), compared to a (+2.8 percent) increase during the first-quarter of 2011. Real hourly compensation in the total manufacturing sector decreased (-3.4 percent) in the first-quarter of 2012, compared to (+0.6 percent) increase in the first-quarter of 2011.

    (BLS/DOL Productivity data from “Productivity and Costs, First Quarter 2012,” USDL 12-1123, released June 6, 2012; next release is August 8, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits UPDATED

  • (BLS/DOL Employment data from “The Employment Situation, USDL 12-1332,” released July 6, 2012; next release is August 3, 2012)

  • First quarter 2012 profits for all non-financial industries (manufacturing being a subcategory) increased $221.7 billion from the fourth quarter of 2011 to $1219.7 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 12-29,” released June 28, 2012; next release is July 27, 2012)
    http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp1q12_3rd.pdf

       

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Manufacturing Employment UPDATED

  • In June 2012, manufacturing employment went up, with an increase of 11,000 jobs.

  • In June, durable goods manufacturing gained 14,000 jobs with increases in transportation equipment (+7,100), fabricated metal products (+4,800), machinery (+3,400), miscellaneous manufacturing (+2,600), primary metals (+800), and electrical equipment and appliances (+300). However, job loss occurred in nonmetallic mineral products (-2,500), furniture and related products (-1,400), and wood products (-1,100). Meanwhile, there was no change of employment in computer and electronic products.

  • In June, nondurable goods manufacturing lost 3,000 jobs with decreases in apparel (-2,300), printing and related support activities (-1,200), petroleum and coal products (-1,000), beverages and tobacco products (-900), leather and allied products (-200), textile mills (-100), and textile product mills (-100). However, job gains occurred in plastics and rubber products (+1,100), chemicals (+900), food manufacturing (+400), and paper and paper products (+200).

  • The manufacturing employment of 12.0 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-1332,” released July 6, 2012; next release is August 3, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In May 2012, manufacturing production was down (-0.4 percent) from previous month and was up (+5.2 percent) above its year-earlier level.

  • Production of durable goods was down (-0.5 percent) from the previous month. The durable industries that registered decreases in output included furniture and related products (-1.7 percent), primary metals (-1.6 percent), motor vehicles and parts (-1.5 percent), nonmetallic mineral products (-1.1 percent), machinery (-0.5 percent), aerospace and miscellaneous transportation equipment (-0.4 percent), and computer and electronic products (-0.1 percent). The durable industries that registered increases in output included wood products (+1.0 percent), miscellaneous (+0.5 percent), electrical equip., appliances, and components (+0.3 percent), and fabricated metal products (+0.1 percent).

  • In May 2012, production of nondurable goods was down (-0.2 percent) from the previous month. The nondurable manufacturing industries that registered decreases in output included textile and product mills (-0.7 percent), plastics and rubber products (-0.5 percent), chemicals (-0.4 percent), paper (-0.4 percent), and food, beverage and tobacco products (-0.3 percent). The nondurable industries that registered increases in output included apparel and leather (+1.0 percent), petroleum and coal products (+0.9 percent), and printing and support (+0.3 percent).

  • Other manufacturing (non-NAICS) was down (-1.3 percent).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released June 15, 2012; next release is July 17, 2012)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In May 2012, manufacturing industries (NAICS based) operated at 78.2 percent of capacity, 0.3 percent below the capacity utilization level from previous month, and down (-0.5 percentage) points below their 1972-2011 average of 78.7 percent.

  • In May 2012, durable manufacturing, capacity utilization operated at 78.0 percent capacity, down (-0.5 points) from previous month. Decreased capacity utilization was registered in motor vehicles and parts (-1.2 points), primary metals (-1.1 points), furniture and related products (-1.1 points), machinery (-0.7 points), computer and electronic products (-0.6 points), aerospace and miscellaneous transportation equipment (-0.5 points), and nonmetallic mineral products (-0.5 points). Increased capacity utilization was registered in wood products (+0.8 points), electrical equip., appliances, and components (+0.4 points), and miscellaneous (+0.2 points). There was no change of capacity utilization in fabricated metal products.

  • In May 2012, non-durable manufacturing, capacity utilization operated 78.4 percent capacity, down (-0.1 points) from the previous month. Decreased capacity utilization was registered in plastics and rubber products (-0.5 points), textile and product mills (-0.4 points), food, beverage, and tobacco products (-0.3 points), paper (-0.3 points), and chemicals (-0.3 points). Increased capacity utilization was registered in petroleum and coal products (+0.9 points), apparel and leather (+0.8 points), and printing and support (+0.3 points).

  • The index for other manufacturing industries (non-NAICS) was down (-0.8 points).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released June 15, 2012; next release is July 17, 2012)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity was up (+5.2 percent) in the first-quarter of 2012, as output increased (+10.0 percent) and hours increased (+4.6 percent). Productivity was up (+9.9 percent) in the durable goods industries and up (+0.1 percent) in the nondurable goods industries. Unit labor costs in manufacturing decreased (-4.9 percent) in the first-quarter of 2012, and decreased (-2.9 percent) over the last four quarters.

  • In durable goods industries, productivity was up (+9.9 percent) from previous quarter, as output increased (15.4 percent), while hours worked increased (4.9 percent).

  • In nondurable goods industries, productivity was up (+0.1 percent) from previous quarter, as output increased (+4.3 percent), and hours worked increased (+4.1 percent).

    (BLS/DOL Productivity data from “Productivity and Costs, First-Quarter 2012,” USDL 12-1123, released June 6, 2012; next release is August 8, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in April 2012 were 8.58 percent lower than the previous month. Imports were 4.90 percent lower.

  • Year-to-date April 2012, U.S. manufactured goods exports accounted for 86.7 percent of all U.S. exports of goods, compared with 85.0 percent a year ago.

  • The year-to-date April 2012 trade deficit in manufactured goods of $135.7 billion was $4.8 billion more when compared with $130.9 billion a year ago.

    (USA Trade Online, U.S. Census Bureau, released June 8, 2012; Next release is July 11, 2012)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments UPDATED

  • Shipments of manufactured durable goods in May, up five of the last six months, increased $1.7 billion or 0.8 percent to $224.3 billion, revised from the previously published 0.7 percent increase. This followed a 0.7 percent April increase.

  • In May, shipments increased in computers and electronic products (+1.7 percent), wood products (+1.7 percent), transportation equipment (+1.6 percent), electrical equipment, appliances, and components (+1.1 percent), nonmetallic mineral products (+0.5 percent), and fabricated metal products (+0.2 percent). However, shipments decreased in furniture and related products (-0.5 percent), miscellaneous durable goods (-0.3 percent), and machinery (-0.1 percent). There was no change of shipment in primary metals.

    (Census Bureau/DOC data from “Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(12)-5, CB12-121),” July 2, 2012; next release is August 2, 2012)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In May 2012, 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 (-4.3 percent) from previous month.

  • A seasonally adjusted decrease in price from April to May was registered liquefied petroleum gas (-9.8 percent), gasoline (-8.9 percent), residential gas (-2.5 percent), and no. 2 diesel fuel (-1.4 percent). An increase in price was registered in home heating oil and distillates (+1.5 percent), and residential electric power (+0.1 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 12-1181,” released June 13, 2012; next release is July 13, 2012)
    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 contracted in June for the first time since July 2009; however, the overall economy grew for the 37th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing contracted in June as the PMI registered 49.7 percent, a decrease of 3.8 percentage points when compared to May's reading of 53.5 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 June were New Orders -12.3 points increase to 47.8; Production, -4.6 points decrease to 51.0; Inventories, -2.0 points decrease to 44.0; Employment, -0.3 points decrease to 56.6; and Supplier Deliveries, +0.2 points increase to 48.9.

    U.S. Industries Reporting Growth in June 2012

    • Furniture & Related Products
    • Printing & Related Support Activities
    • Fabricated Metal Products
    • Miscellaneous Manufacturing
    • Electrical Equipment, Appliances & Components
    • Machinery
    • Primary Metals

    (Institute for Supply Management, data released July 2, 2012; next release is August 1, 2012)
    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