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Manufacturing Biweekly Update

August 6, 2010 [past updates]


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


Biweekly Notes

US manufacturing expands for 12th straight month

The US manufacturing sector expanded for the 12th straight month in July, beating most analysts' expectations. The Institute of Supply Management said its manufacturing index fell to 55.5 points, from 56.2 percent in June, a smaller drop than predicted. The reading -- which compiles managers' reports on everything from new orders to stock inventories -- beat market expectations of 54.2 percent. A reading above 50 percent indicates an expanding manufacturing sector. "July marks 12 consecutive months of growth in manufacturing, and indications are that demand is still quite strong in 10 of 18 industries," the ISM's Norbert Ore said in a statement.

(AFP |Yahoo News |August 2, 2010)
news.yahoo.com

US manufacturing employment rose by 36,000
Within the private sector, employment gains continued in manufacturing, health care, and mining. Manufacturing employment rose by 36,000. Most of the gain occurred in motor vehicles and parts manufacturing (+21,000), as some plants deviated from their normal practice of shutting down in July for retooling. Motor vehicles had added 32,000 jobs during the first half of the year. Employment in fabricated metals increased by 9,000 over the month. The manufacturing workweek rose by one-tenth of an hour in July, after falling by half an hour in June.

(BLS|August 6, 2010)
www.bls.gov

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In July 2010, average hourly earnings in manufacturing were $18.57 (preliminary), up 0.22 percent from June 2010’s $18.53 (preliminary), and up 1.70 percent from June 2009’s $18.26.

    (BLS/DOL Employment data from “The Employment Situation, USDL 10-1076,” released August 6, 2010; next release is September 3, 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 46.5 percent, or $79.5 billion, to $250.4 billion from $170.9 billion in the fourth quarter. Compared with first quarter profits of 2009, manufacturing profits were up $109.4 billion in the first quarter of 2010.

  • • First quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 27.6 percent from the fourth quarter of 2009 to $985.3 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-37,”released July 30, 2010; next release is Aug 27, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp2q10_adv.pdf

       

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Manufacturing Employment updated

  • In July, 2010, manufacturing employment went up, with an increase of 36,000 jobs.

  • In July, durable goods manufacturing gained 36,000 jobs, with increases in transportation equipment (27,600), fabricated metal products (9,100), machinery (3,100), electrical equipment and appliances (1,600), computer and electronic products (1,100), primary metals (700), and miscellaneous manufacturing (600). Job losses occurred in wood products (-4,700), and furniture and related products (-2,900). There was no change in nonmetallic mineral products.

  • There was no net change in employment in nondurable goods manufacturing. However, job losses occurred in beverages and tobacco products (-1,300), paper and paper products (-1,200), and chemicals (-1,200), food manufacturing (-800), leather and allied products (-600), and petroleum and coal products (-300). Meanwhile, job gains occurred in plastics and rubber products (2,700), textile mills (1,000), apparel (600), printing and related support activities (500), and textile product mills (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-10-1076,” released August 6, 2010; next release is September 3, 2010) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In June 2010, manufacturing production was down 0.4 percent from previous month and was 8.3 percent above its year-earlier level.

  • Production of durable goods was up 0.1 percent from previous month. The durable manufacturing industry that registered increases in output included primary metal (2.2 percent), machinery (1.4 percent), nonmetallic mineral products (0.9 percent), fabricated metal products (0.6 percent), aerospace and miscellaneous transportation equipment (0.5 percent), and computer and electronic products (0.3 percent). The durable industry that registered decreases in output included wood products (-2.9 percent), motor vehicles and parts (-1.9 percent), miscellaneous (-1.9 percent), electrical equip., appliances, and components (-0.5 percent), and furniture and related products (-0.5 percent).

  • The production of nondurable goods was down 0.7 percent from previous month. The nondurable manufacturing industries that registered increases in output included apparel and leather (1.4 percent), petroleum and coal products (1.4 percent), and plastics and rubber products (0.5 percent). The nondurable industry that registered decreases in output included food, beverage, and tobacco products (-1.7 percent), paper (-0.8 percent), textile and product mills (-0.7 percent), printing and support (-0.7 percent), and chemical (-0.6 percent).

  • The index for other manufacturing industries (non-NAICS) was down 2.1 percent from previous month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released July 15, 2010; next release is August 17, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In June 2010, manufacturing industries (NAICS based) operated at 71.6 percent of capacity, 7.4 percentage points below their 1972-2009 average of 79.0 percent and 0.2 percent points lower than their revised capacity utilization level in May 2010.

  • In durable manufacturing, capacity utilization remain the same at 69.6 percent. Increased capacity utilization was registered in primary metal (1.4 points), machinery (1.1 points), nonmetallic mineral products (0.6 points), fabricated metal products (0.5 points), and aerospace and miscellaneous transportation equipment (0.2 points). Decreased capacity utilization was registered in miscellaneous (-1.5 points), wood products (-1.4 points), motor vehicles and parts (-1.1 points), electrical equip., appliances, and components (-0.3 points), computer and electronic products (-0.2 points), and furniture and related products (-0.1 points).

  • In non-durable manufacturing, capacity utilization decreased 0.5 percentage points in June from May (revised) to 74.1 percent. Increased capacity utilization was registered in apparel and leather (1.5 points), petroleum and coal products (1.3 points), and plastics and rubber products (0.3 points). Decreased capacity utilization was registered in food, beverage, and tobacco products (-1.3 points), paper (-0.4 points), chemical (-0.4 points), printing and support (-0.3 points), and textile and product mills (-0.2 points).

  • The index for other manufacturing industries (non-NAICS) decreased 1.5 points from last month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released July 15, 2010; next release is August 17, 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 May 2010, U.S. manufactured goods exports accounted for 80.5 percent of all U.S. exports of goods, compared with 82.1 percent a year ago.

  • Manufactured goods exports in May were 3.8 percent higher than the previous month. Imports were up 4.1 percent.

  • The year to date May 2010 trade deficit in manufactured goods of $135.9 billion was $20.3 billion more when compared with $115.6 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-101, BEA10-36, FT-900(10-05),” released July 13, 2010; next release is August 11, 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 June, down two consecutive months, decreased $0.7 billion or 0.3 percent to $195.0 billion. This followed a 0.7 percent May decrease. Computers and electronic products, down four of the last five months, had the largest decrease, $1.3 billion or 4.1 percent to $31.3 billion.

  • In June, shipments increased in transportation equipment (2.8 percent), machinery (0.7 percent), and electrical equipment, appliances, components (0.6 percent). Shipment decreased in computer and electronic products (-4.1 percent), primary metals (-1.5 percent), and fabricated metal products (-0.7 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-06, CB10-112),”July 28, 2010; next release is August 25, 2010)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In June 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.1 percent compared to previous month.

  • The index for finished energy goods was down 0.5 percent from previous month.

  • A seasonally adjusted decrease of price from May to June was registered in home heating oil and distillates (-8.1 percent), No. 2 diesel fuel (-7.4 percent), liquefied petroleum gas (-3.5 percent), and gasoline price (-1.6 percent). A seasonally adjusted increase of price was registered in residential gas (2.1 percent), and residential electric power (0.7 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-0965,” released July 15, 2010; next release is August 17, 2010)
    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 12th consecutive month, and the overall economy grew for the 15th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in July as the PMI registered 55.5 percent, a decrease of 0.7 percentage point when compared to June's reading of 56.2 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 up 4.4 points to 50.2, Supplier Deliveries up 1.0 points to 58.3, Employment up 0.8 points to 58.6, New Orders decreased 5.0 points to 53.5, and Production decreased 4.4 points to 57.0.

    U.S. Industries Reporting Growth in July 2010

    • Plastics & Rubber Products
    • Miscellaneous Manufacturing
    • Paper Products
    • Electrical Equipment, Appliances & Components
    • Transportation Equipment
    • Primary Metals
    • Textile Mills
    • Computer & Electronic Products
    • Fabricated Metal Products
    • Chemical Products

    (Institute for Supply Management data released August 2, 2010; next release is September 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