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Manufacturing Biweekly Update

July 22, 2011 [past updates]


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


Biweekly Notes

Regional factory rebound, jobless claims up

Factory activity in the Mid-Atlantic region bounced back in July, lifting hopes of a pick-up in economic growth in the third quarter. However, a rise in the number of Americans filing new claims for unemployment benefits suggested the reacceleration in output would not be as strong as had previously anticipated. The Philadelphia Federal Reserve Bank said its business activity index rose to 3.2 from minus 7.7 in June, which was the lowest since July 2009. The rise beat economists' expectations for a reading of 2.0. A reading above zero indicates expansion in the region's manufacturing. Separately, initial claims for state unemployment benefits increased 10,000 to 418,000, the Labor Department said, above economists' expectations for a rise to 410,000. Economists said the elevated claims indicated the economy's anticipated pull out of the soft patch it has been trapped in since the beginning of the year might only be modest.
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(Reuters|Yahoo News| July 21, 2011)

Construction, manufacturing lead Mass. job growth in June

Two of the hardest-hit industries during the past recession were among the strongest providers of job growth in Massachusetts last month, according to new figures released by the state. The Executive Office of Labor and Workforce Development reported Thursday that the state added an estimated 10,400 jobs in June. The state’s unemployment rate, meanwhile, remained stable at 7.6 percent, compared with a national jobless rate of 9.2 percent. The construction and manufacturing sectors showed surprising resiliency last month, with the construction sector growing its work force by 2,500 jobs, or 2.3 percent, last month and the manufacturing sector expanding by 2,900 jobs, or 1.1 percent. During the past year, more than 4,000 jobs have been added in both the construction and manufacturing sectors in Massachusetts, according to the state labor agency’s figures.
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(patriotledger.com| July 22, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In June 2011, average hourly earnings in manufacturing were $18.91 (preliminary), down 0.05 percent from previous month, and up 1.72 percent from June 2010’s $18.59.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-1011,” released July 8 2011; next release is August 5, 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

  • 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 June 2011, manufacturing employment went up, with an increase of 6,000 jobs.

  • In June, durable goods manufacturing gained 15,000 jobs with increase in fabricated metal products (7,800), machinery (4,100), transportation equipment (2,300), miscellaneous manufacturing (2,500), computer and electronic products (2,000), primary metals (1,300), and electrical equipment and appliances (700). However, job losses occurred in wood products (-5,100), nonmetallic mineral products (-800), furniture and related products (-200).

  • In June, the employment level in nondurable goods manufacturing sector lost 9,000 jobs with decreases in food manufacturing (-7,900), plastics and rubber products (-2,500), printing and related support activities (-2,300), apparel (-600), petroleum and coal products (-400), textile product mills (-300), and leather and allied products (-100). Meanwhile, job gains occurred in beverages and tobacco products (2,000), paper and paper products (1,100), textile mills (800), and chemicals (600).

  • 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-11-1011,” released July 8, 2011; next release is August 5, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production updated

  • In June 2011, manufacturing production remained the same as the previous month and was 3.7 percent above its year-earlier level.

  • Production of durable goods also remained the same as the previous month. The durable industries that registered increases in output included primary metal (1.6 percent), fabricated metal products (1.4 percent), miscellaneous (0.9 percent), machinery (0.6 percent), and aerospace and miscellaneous transportation equipment (0.5 percent). The durable industries that registered decreases in output included furniture and related products (-2.1 percent), motor vehicles and parts (-2.0 percent), wood products (-1.2 percent), computer and electronic products (-0.7 percent), nonmetallic mineral products (-0.4 percent), and electrical equip., appliances, and components (-0.2 percent).

  • Production of nondurable goods was up 0.1 percent from the previous month. The nondurable manufacturing industries that registered increases in output included petroleum and coal products (0.8 percent), textile and product mills (0.7 percent), and chemicals (0.3 percent). The nondurable industries that registered decreases in output included printing and support (-1.0 percent), apparel and leather (-0.7 percent), and paper (-0.3 percent), food, beverage, and tobacco products (-0.2 percent), and plastics and rubber products (-0.1 percent).

  • Other manufacturing industries (non-NAICS) was down 0.5 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released July 15, 2011; next release is August 16, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In June 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 at the same as their revised capacity utilization level in May 2011.

  • In June 2011, durable manufacturing, capacity utilization operated at 72.8 percent capacity, down 0.1 points from previous month. Increased capacity utilization was registered in primary metals (1.2 points), fabricated metal products (1.2 points), miscellaneous (0.5 points), machinery (0.4 points), and aerospace and miscellaneous transportation equipment (0.3 points). Decreased capacity utilization was registered in furniture and related products (-1.4 points), motor vehicles and parts (-1.4 points), computer and electronic products (-1.2 points), wood products (-0.6 points), nonmetallic mineral products (-0.1 points), and electrical equip., appliances, and components (-0.1 points).

  • In June 2011, non-durable manufacturing, capacity utilization operated at 77.2 percent, maintaining the level of the previous month. Increased capacity utilization was registered in petroleum and coal products (0.6 points), textile and product mills (0.6 points), chemicals (0.3 points), and plastics and rubber products (0.1 points). Decreased capacity utilization was registered in printing and support (-0.6 points), apparel and leather (-0.5 points), food, beverage, and tobacco products (-0.3 points), and paper (-0.2 points).

  • The index for other manufacturing industries (non-NAICS) decreased 0.3 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released July 15, 2011; next release is August 16, 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 updated

  • Manufactured goods exports in May were 0.6 percent higher than the previous month. Imports were up 4.8 percent.

  • Year to date May 2011, U.S. manufactured goods exports accounted for 84.7 percent of all U.S. exports of goods, compared with 86.4 percent a year ago.

  • The year to date May 2011 trade deficit in manufactured goods of $172.3 billion was $36.2 billion more when compared with $136.2 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, July 12 data release. Next release is August 11, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in May, up five of the last six months, increased $0.9 billion or 0.4 percent to $195.0 billion, revised from the previously published 0.3 percent increase. This followed a 1.4 percent April decrease.

  • In May, shipments increased in machinery (2.3 percent), electrical equipment, appliances, and components (1.9 percent), primary metals (1.7 percent), nonmetallic mineral products (0.9 percent), fabricated metal products (0.4 percent), and miscellaneous durable goods (0.1 percent). However, shipments decreased in wood products (-1.4 percent), computers and electronic products (-0.6 percent), transportation equipment (-0.5 percent). Furniture and related products showed no change in shipments.

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-05, CB11-120),” July 5, 2011; next release is August 3, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In June 2011, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.3 percent compared to previous month.

  • The index for finished energy goods was down 2.8 percent from previous month.

  • A seasonally adjusted increase of price from May to June was registered in no. 2 diesel fuel (1.8 percent), and residential gas (1.1 percent). Decrease of price from May to June was registered in gasoline price (-4.7 percent), liquefied petroleum gas (-4.5 percent), residential electric power (-2.0 percent), and home heating oil and distillates (-1.9 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-0889,” released July 14, 2011; next release is August 17, 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 June for the 23rd consecutive month, and the overall economy grew for the 25th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in June as the PMI registered 55.3 percent, an increase of 1.8 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: Inventories, 5.4 points increase to 54.1; Employment, 1.7 points increase to 59.9; New Orders, 0.6 points increase to 51.6; Supplier Deliveries, 0.6 points increase to 56.3; and Production, 0.5 points increase to 54.5.

    U.S. Industries Reporting Growth in June 2011

    • Miscellaneous Manufacturing
    • Printing & Related Support Activities
    • Computer & Electronic Products
    • Paper Products
    • Textile Mills
    • Petroleum & Coal Products
    • Nonmetallic Mineral Products
    • Transportation Equipment
    • Chemical Products
    • Fabricated Metal Products
    • Machinery
    • Electrical Equipment, Appliances & Components

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