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Manufacturing Biweekly Update

August 3, 2012 [past updates]


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


Biweekly Notes

US Manufacturing Jobs Highest Since April 2009

It wasn’t a bad month for US manufacturers for July. The US economy added 25,000 jobs during the month of July on a seasonally-adjusted basis, according to the Labor Department, that’s up from the gain of 11,000 jobs the sector posted last month. Sectors adding the most jobs included transportation equipment and metal fabrication, while machinery and semiconductor posted modest losses during the month. The Labor Department classifies manufacturing as a broader “goods-producing” sector of the economy, which also includes construction and mining. Construction lost 1,000 jobs in July (statistically negligible) while the number of mining jobs were effectively unchanged from the month before.
(Forbes| August 3, 2012)
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U.S. Manufacturing Unexpectedly Shrinks for Second Month

American manufacturing unexpectedly contracted in July for a second month, reflecting a drop in orders that threatens to undercut a mainstay of the recovery. The Institute for Supply Management’s factory index was 49.8 last month, little changed from a three-year low of 49.7 reached in June, the Tempe, Arizona-based group said today. Economists surveyed by Bloomberg News projected a reading of 50.2, according to the median estimate, just above the 50 mark that separates expansions and contractions. Manufacturers from China to the euro area joined the U.S. in showing signs of retrenching, indicating Europe’s debt crisis and the looming U.S. government spending cuts and tax increases that constitute the so-called fiscal cliff are taking a toll on customers globally. Federal Reserve policy makers today acknowledged that the economy has slowed and foreshadowed new steps to boost the weakening expansion. Estimates for the U.S. ISM index in the Bloomberg survey of 84 economists ranged from 48.5 to 52. Manufacturing accounts for about 12 percent of the economy and has been a linchpin for the expansion that began in June 2009.
(Bloomberg| August 1, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates UPDATED

  • • In July 2012, average hourly earnings in manufacturing were $19.17 (preliminary), up 0.16 percent from previous month, and up 1.16 percent from July 2011’s $18.95.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-1531,” released August 3, 2012; next release is September 7, 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

  • In the first quarter of 2012, manufacturing profits increased 27.1 percent, or $77.6 billion, to $363.5 billion from $285.9 billion in the last quarter. Compared with first quarter profits of 2011, manufacturing profits were up $148.0 billion in the first quarter of 2012.

  • First quarter 2012 profits for all non-financial industries (manufacturing being a subcategory) increased $213.4 billion from the fourth quarter of 2011 to $1216.8 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 12-32,” released July 27, 2012; next release is August 29, 2012)
    http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp2q12_adv.pdf

           

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    Manufacturing Employment UPDATED

    • In July 2012, manufacturing employment went up, with an increase of 25,000 jobs.

    • In July, durable goods manufacturing gained 24,000 jobs with increases in transportation equipment (+20,500), fabricated metal products (+5,200), primary metals (+1,400), wood products (+200), and furniture and related products (+100). However, job loss occurred in machinery (-2,200), electrical equipment and appliances (-1,100), computer and electronic products (-600), and nonmetallic mineral products (-100). Meanwhile, there was no change of employment in miscellaneous manufacturing.

    • In July, nondurable goods manufacturing gained 100 jobs with increases in plastics and rubber products (+1,600), chemicals (+1,100), food manufacturing (+1,100), beverages and tobacco products (+900), apparel (+300), and petroleum and coal products (+100). However, job loss occurred in paper and paper products (-1,800), printing and related support activities (-1,400), textile product mills (-700), and leather and allied products (-300). Meanwhile, there was no change of employment in textile mills.

    • 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 12-1531,” released August 3, 2012; next release is September 7, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

           

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    Manufacturing Production

    • In June 2012, manufacturing production was up (+0.7 points from previous month and was up (+5.6 percent) above its year-earlier level.

    • Production of durable goods was up (+0.8 percent) from the previous month. The durable industries that registered increases in output included machinery (+2.3 percent), motor vehicles and parts (+1.9 percent), computer and electronic products (+1.1 percent), nonmetallic mineral products (+0.8 percent), wood products (+.8 percent), fabricated metal products (+.5 percent), miscellaneous (+.2 percent) and aerospace and miscellaneous transportation equipment (+0.1 percent). The durable industries that registered decreases in output included primary metals (-1.2 percent), electrical equip., appliances, and components (-0.9 percent), and furniture and related products (-0.3 percent).

    • IIn June 2012, production of nondurable goods was up (+0.5 percent) from the previous month. The nondurable industries that registered increases in output included textile and product mills (+1.8 percent), printing and support (+1.0 percent), plastics and rubber products (+0.9 percent), petroleum and coal products (+0.9 percent), chemicals (+0.8 percent), and paper (+0.4 percent). The nondurable manufacturing industries that registered decreases in output included apparel and leather (-1.6 percent) and food, beverage and tobacco products (-0.1 percent).

    • Other manufacturing (non-NAICS) was up (+1.6 percent).

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

           

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    Manufacturing Capacity Utilization

    • In June 2012, manufacturing industries (NAICS based) operated at 78.2 percent of capacity, + 0.4 percentage points above the capacity utilization level from previous month, and down (-0.5 percentage points) below their 1972-2011 average of 78.7 percent.

    • In June 2012, durable manufacturing, capacity utilization operated at 78.2 percent capacity, up (+0.4 percentage points) from the previous month. Increased capacity utilization was registered in machinery (+1.8 points), motor vehicles and parts (+1.2 points), wood products (+.7 points), nonmetallic mineral products (+.6 points), computer and electronic products (+.4 points) and fabricated metal products (+0.3 points). Decreased capacity utilization was registered in electrical equip., appliances, and components (-.8 points), primary metals (-0.8 points), miscellaneous (-0.2 points) furniture and related products (-.2 points) and aerospace and miscellaneous transportation equipment (-0.1 points).

    • In June 2012, non-durable manufacturing, capacity utilization operated 78.2 percent capacity, up (+0.4 percentage points) from the previous month. Increased capacity utilization was registered in textile and product mills (+1.4 points), petroleum and coal products (+1.0 points), printing and support (+0.6 points), plastics and rubber products (+0.6 points), chemicals (+0.5 points) and paper (+0.5 points). Decreased capacity utilization was registered apparel and leather (-1.0 points) and in food, beverage, and tobacco products (-0.2 points).

    • The index for other manufacturing industries (non-NAICS) was up (+1.1 points).

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released July 17, 2012; next release is August 15, 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 May 2012 were 3.5 percent higher than the previous month. Imports were 6.7 percent higher.

    • Year-to-date May 2012, U.S. manufactured goods exports accounted for 86.9 percent of all U.S. exports of goods, compared with 85.3 percent a year ago.

    • The year-to-date May 2012 trade deficit in manufactured goods of $176.6 billion was $6.7 billion more when compared with $169.9 billion a year ago.

      ((USA Trade Online, U.S. Census Bureau, released July 11, 2012; Next release is August 9, 2012)
      http://www.usatradeonline.gov/

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    Manufactured Goods Shipments UPDATED

    • Shipments of manufactured durable goods in June, down following three consecutive monthly increases, decreased $0.3 billion or 0.1 percent to $224.8 billion, revised from the previously published 0.1 percent increase. This followed a 1.1 percent May increase.

    • In June, shipments decreased in nonmetallic mineral products (-1.3 percent), transportation equipment (-1.1 percent), wood products (-0.9 percent), fabricated metal products (-0.5 percent), primary metals (-0.5 percent), furniture and related products (-0.4 percent), electrical equipment, appliances, and components (-0.3 percent), and computers and electronic products (-0.1 percent). However, shipments increased in machinery (+3.0 percent), and miscellaneous durable goods (+0.2 percent).

      (Census Bureau/DOC data from “Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(12)-6, CB12-139),” August 2, 2012; next release is August 31, 2012)
      http://www.census.gov/manufacturing/m3/

           

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    Manufactured Goods Prices

    • In June 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 (-0.9 percent) from previous month.

    • A seasonally adjusted decrease in price from May to June was registered liquefied petroleum gas (-24.7 percent), home heating oil and distillates (-8.3 percent), no. 2 diesel fuel (-8.8 percent) and residential electric power (-2.1 percent). An increase in price was registered in residential gas (+3.5 percent) and gasoline (+1.9 percent)

      (BLS/DOL data from “Producer Price Indexes, USDL 12-1181,” released July 13, 2012; next release is August 14, 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 July for the second time since July 2009; however, the overall economy grew for the 38th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

    • Manufacturing contracted in July as the PMI registered 49.8 percent, an increase of 0.1 percentage point when compared to June's reading of 49.7 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 July were Inventories, +5.0 points increase to 49.0; Production, +0.3 points increase to 51.3; New Orders +0.2 points increase to 48.0; Employment, -4.6 points decrease to 52.0; and Supplier Deliveries, -0.2 points decrease to 48.7.

      U.S. Industries Reporting Growth in July 2012

      • Plastics & Rubber Products
      • Electrical Equipment, Appliances & Components
      • Primary Metals
      • Petroleum & Coal Products
      • Fabricated Metal Products
      • Food, Beverage & Tobacco Products
      • Furniture & Related Products

      (Institute for Supply Management, data released August 1, 2012; next release is September 4, 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