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Manufacturing Biweekly Update

August 17, 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 industrial production rose 0.6 pct. in July

U.S. factories made more cars, computers and airplanes last month, a hopeful sign that manufacturing is recovering after a weak spring. Industrial production, which includes output at factories, mines and utilities increased 0.6 percent in July from June, the fourth straight monthly increase, the Federal Reserve reported Wednesday. Factory output, the most important component of industrial production, rose 0.5 percent, the second straight increase. Factory output has risen 21.9 percent since its recession low hit in June 2009 and is just 1.7 percent below the pre-recession peak for factory output reached in April 2007. Mining output, which includes oil and gas production as well as coal mining, increased 1.2 percent in July. Utility output rose 1.3 percent, largely because of hot weather in many parts of the country.

(Huffington Post| August 15, 2012)
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US Manufacturing Jobs Will Grow As Japan's Carmakers Move Capacity To North America

Amid constant political caterwauling about the demise of American manufacturing, Japanese automakers like Toyota Motor Corporation (NYSE: TM), Honda Motor Co. (NYSE: HMC) and Nissan Motor Co. (Tokyo: 7201) are gradually bringing manufacturing jobs to the U.S., Mexico and Canada by building new factories and adding extra shifts at existing facilities to meet resurgent demand. All three of Japan's largest automakers are pushing to locate production of cars meant for the U.S. market in North America, primarily in Mexico and the United States. Toyota, Honda and Nissan are all recovering from supply chain disruptions caused by last year's tsunami in Japan and floods in Thailand, and localizing production for the U.S. market provides a natural hedge against supply chain disruptions. Moreover, the continued high value of the Japanese yen against the dollar means that it is now more expensive for Japanese car companies to ship cars overseas to the U.S. than it is to build them locally.

(International Business Times |August 14, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • • 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) UPDATED

  • In the second-quarter of 2012, hourly compensation from previous quarter, annual rate (preliminary) was up (+0.5 percent) in total manufacturing, down (-0.8 percent) in durable manufacturing and up (+2.8 percent) in nondurable manufacturing.

  • In the second-quarter of 2012, hourly compensation of all manufacturing workers decreased (-0.1 percent), compared to a (+2.9 percent) increase during the second-quarter of 2011. Real hourly compensation in the total manufacturing sector decreased (-1.9 percent) in the second-quarter of 2012, compared to (-0.4 percent) decrease in the second-quarter of 2011.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2012,” USDL 12-1588, released August 8, 2012; next release is September 5, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • 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

    • 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 UPDATED

    • In July 2012, manufacturing production was up (+0.5 percent) from previous month and was up (+5.0 percent) above its year-earlier level.

    • In July 2012, production of durable goods was up (+0.8 percent) from the previous month. The durable industries that registered increases in output included motor vehicles and parts (+3.3 percent), aerospace and miscellaneous transportation equipment (+1.6 percent), computer and electronic products (+1.5 percent), miscellaneous manufactured product (+1.2 percent), primary metals (+1.1 percent), furniture and related products (+0.9 percent), electrical equip., appliances, and components (+0.4 percent) and fabricated metal products (+0.2 percent). The durable industries that registered decreases in output included machinery (-1.9 percent), wood products (-1.8 percent), and nonmetallic mineral products (-0.7 percent).

    • In July 2012, production of nondurable goods was unchanged from the previous month. The nondurable manufacturing industries that registered increases in output included plastics and rubber products (+0.7 percent), food, beverage and tobacco products (+0.5 percent), and paper (+0.2 percent). The nondurable industries that registered decreases in output included textile and product mills (-1.5 percent), printing and support (-0.8 percent), petroleum and coal products (-0.8 percent), and chemicals (-0.1 percent). Meanwhile, production of apparel and leather was unchanged.

    • In July 2012, production of other manufacturing goods (non-NAICS) was unchanged.

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 15, 2012; next release is September 14, 2012)
      http://www.federalreserve.gov/releases/g17/Current/g17.pdf

           

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    Manufacturing Capacity Utilization UPDATED

    • In July 2012, manufacturing industries (NAICS based) operated at 78.4 percent of capacity, + 0.2 percent above the capacity utilization level from previous month, and down (-0.3 percentage points) below their 1972-2011 average of 78.7 percent.

    • In July 2012, durable manufacturing, capacity utilization operated at 78.6 percent capacity, up (+0.5 percentage points) from the previous month. Increased capacity utilization was registered in motor vehicles and parts (+2.2 points), aerospace and miscellaneous transportation equipment (+1.1 points), primary metals (+0.9 points), computer and electronic products (+0.9 points), furniture and related products (+0.7 points), miscellaneous (+0.5 points), electrical equip., appliances, and components (+0.3 points), and fabricated metal products.(+0.1 points). Decreased capacity utilization was registered in machinery (-1.8 points), wood products (-1.1 points), and nonmetallic mineral products (-0.3 points).

    • In July 2012, non-durable manufacturing, capacity utilization operated 78.2 percent capacity, unchanged from the previous month. Increased capacity utilization was registered in plastics and rubber products (+0.4 points), paper (+0.3 points), food, beverage, and tobacco products (+0.3 points), and apparel and leather (+0.1 points). Decreased capacity utilization was registered in textile and product mills (-0.9 points), printing and support (-0.5 points), petroleum and coal products (-0.4 points), and chemicals (-0.2 points).

    • The index for other manufacturing industries (non-NAICS) was up (+0.1 points).

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 15, 2012; next release is September 14, 2012)
      http://www.federalreserve.gov/releases/g17/Current/g17.pdf

           

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    Manufacturing Productivity UPDATED

    • Manufacturing sector productivity was up (+0.2 percent) in the second-quarter of 2012, as output increased (+1.7 percent) and hours increased (+1.4 percent). Productivity was up (+4.3 percent) in the durable goods industries and down (-4.0 percent) in the nondurable goods industries. Unit labor costs in manufacturing increased (+0.3 percent) in the second-quarter of 2012, and decreased (-2.9 percent) over the last four quarters.

    • In durable goods industries, productivity was up (+4.3 percent) from previous quarter, as output increased (+6.2 percent), while hours worked increased (+1.9 percent).

    • In nondurable goods industries, productivity was down (-4.0 percent) from previous quarter, as output decreased (-3.4 percent), and hours worked increased (+0.7 percent).

      (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2012,” USDL 12-1588, released August 8, 2012; next release is September 5, 2012)
      http://www.bls.gov/news.release/pdf/prod2.pdf

           

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    Manufacturing Trade UPDATED

    • Manufactured goods exports in June 2012 were (+1.84 percent) higher than the previous month. Imports were (-2.14 percent) lower.

    • Year-to-date June 2012, U.S. manufactured goods exports accounted for 87.1 percent of all U.S. exports of goods, compared with 85.5 percent a year ago.

    • The year-to-date June 2012 trade deficit in manufactured goods of $211.9 billion was $2.1 billion more when compared with $209.8 billion a year ago.

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

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    Manufactured Goods Shipments

    • 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 UPDATED

    • In July 2012, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.4 percent compared to previous month.

    • The index for finished energy goods was down (-0.4 percent) from previous month.

    • A seasonally adjusted decrease in price from June to July was registered in gasoline (-3.1 percent), and home heating oil and distillates (-0.1 percent). An increase in price was registered in liquefied petroleum gas (+3.3 percent), no. 2 diesel fuel (+3.1 percent), residential electric power (+1.3 percent), and residential gas (+1.0 percent).

      (BLS/DOL data from “Producer Price Indexes, USDL 12-1645,” released August 14, 2012; next release is September 13, 2012)
      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 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