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Manufacturing Biweekly Update

August 5, 2011 [past updates]


U.S. Manufacturing Trends Current Period Year-to-Date
Wage Rates up 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

US new jobs surprise with 117,000 surge in July; manufacturing adds 24,000 jobs

The US economy generated a higher-than-expected 117,000 jobs in July, cutting the unemployment rate to 9.1 percent and giving hopes that the economy has not stalled, the Labor Department said Friday. The department also sharply revised upward the data for the previous two months, which had originally raised concerns that the economy had flat-lined. The better-than-expected numbers came after markets worldwide plunged on worries that the data would show the US economy headed into stagnation. The private sector generated 154,000 jobs in July, easily offsetting a loss of 37,000 positions in the public sector -- many of which came from sweeping layoffs in the state of Minnesota as the government shut down due to a political fight over spending and union benefits. On average, economists had forecast only a net 84,000 jobs generated."Job gains occurred in health care, retail trade, manufacturing and mining," the department said. (MBU: In July 2011, manufacturing employment went up, with an increase of 24,000 jobs)
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(AFP |Yahoo News| August 5, 2011)

Manufacturing growth hits lowest level in 2 years

Manufacturers had their weakest growth in two years in July, a sign that the economy could weaken this summer. The Institute for Supply Management, a trade group of purchasing executives, said Monday that its index of manufacturing activity fell to 50.9 percent in July from 55.3 percent in June. The reading was the lowest since July 2009 — one month after the recession officially ended. Any level above 50 indicates growth. The manufacturing sector has expanded for 23 straight months. Still, new orders shrank for the first time since the recession ended. Companies slashed their inventories after building them up in June. Output, employment, and prices paid by manufacturers all grew more slowly in July. The disappointing report on manufacturing is the first major reading on how the economy performed in July. It suggests the dismal economic growth in the first half of the year could extend into the July-September quarter.
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(AP| Yahoo News| August 2, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates Updated

  • In July 2011, average hourly earnings in manufacturing were $19.02 (preliminary), up 0.6 percent from previous month, and up 2.3 percent from July 2010’s $18.60.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-1151,” released August 5, 2011; next release is September 2, 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 15.9 percent, or $29.9 billion, to $217.6 billion from $187.7 billion in the fourth quarter. Compared with first quarter profits of 2010, manufacturing profits were up $1.4 billion in the first quarter of 2011.

  • First quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $100.3 billion (revised) from the fourth quarter of 2010 to $858.8 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-38,” released July 29, 2011; next release is July 29, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp2q11_adv.pdf

       

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Manufacturing Employment Updated

  • In July 2011, manufacturing employment went up, with an increase of 24,000 jobs.

  • In July, durable goods manufacturing gained 23,000 jobs with increase in transportation equipment (14,400), fabricated metal products (4,500), furniture and related products (2,800), computer and electronic products (2,500), machinery (1,500), primary metals (1,200), and electrical equipment and appliances (700). However, job losses occurred in wood products (-4,100), miscellaneous manufacturing (-400), and nonmetallic mineral products (-300).

  • In July, nondurable goods manufacturing sector gained 1,000 jobs with increases in plastics and rubber products (2,100), food manufacturing (1,700), chemicals (1,300), textile mills (800), and paper and paper products (600). Meanwhile, job losses occurred in apparel (-2,000), printing and related support activities (-1,600), beverages and tobacco products (-700), textile product mills (-400), petroleum and coal products (-200), and leather and allied products (-100).

  • The manufacturing employment of 11.7 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-11-1151,” released August 5, 2011; next release is September 2, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • 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

  • 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

  • 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 Updated

  • Shipments of manufactured durable goods in June, up six of the last seven months, increased $1.0 billion or 0.5 percent to $196.1 billion, unchanged from the previously published increase. This followed a 0.5 percent May increase.

  • In June, shipments increased in machinery (2.8 percent), primary metals (2.6 percent), fabricated metal products (0.9 percent), nonmetallic mineral products (0.6 percent), miscellaneous durable goods (0.6 percent), and electrical equipment, appliances, and components (0.3 percent). However, shipments decreased in computers and electronic products (-1.8 percent), wood products (-0.7 percent), furniture and related products (-0.6 percent), and transportation equipment (-0.4 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-06, CB11-131),” August 3, 2011; next release is August 31, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • 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  Updated

  • Economic activity in the manufacturing sector expanded in July for the 24th consecutive month, and the overall economy grew for the 26th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in July as the PMI registered 50.9 percent, a decrease of 4.4 percentage points when compared to June's reading of 55.3 percent. The PMI registered the lowest reading since July 2009, when it registered 49 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: Employment, 6.4 points decrease to 53.5; Supplier Deliveries, 5.9 points decrease to 50.4; Inventories, 4.8 points decrease to 49.3; New Orders, 2.4 points decrease to 49.2; and Production, 2.2 points decrease to 52.3.

    U.S. Industries Reporting Growth in July 2011

    • Paper Products
    • Furniture & Related Products
    • Computer & Electronic Products
    • Transportation Equipment
    • Wood Products
    • Petroleum & Coal Products
    • Printing & Related Support Activities
    • Primary Metals
    • Fabricated Metal Products
    • Nonmetallic Mineral Products

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