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Manufacturing Biweekly Update

September 30, 2011 [past updates]


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


Biweekly Notes

Surge in manufacturing provides one bright spot in an otherwise weak economy

Consumers struggled to make ends meet in August as incomes fell for the first time in nearly two years, while a surge in Midwest manufacturing this month provided one bright spot in an otherwise weak economy. Income slipped 0.1 percent, the Commerce Department said on Friday, the first decline since October 2009 and contrasted with economists' expectations for a 0.1 percent advance. But the sting from the weak income report was softened by the solid factory activity in the Midwest in September and news that consumers grew more optimistic as the month ended. The Institute for Supply Management-Chicago said its business barometer rose to 60.4 from 56.5 in August. Economists had expected it to decline to 55.5. A reading above 50 indicates expansion in the regional economy.
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(Reuters |Yahoo News |September 30, 2011)

US companies ordered more machinery-positive sign for the slumping economy

Companies ordered more machinery, computers and communication equipment in August, a positive sign for the slumping U.S. economy. An increase in demand for those kind of longer-lasting factory goods suggests businesses are sticking with their investment plans, despite slow growth and weak consumer spending. Overall orders for durable goods slipped 0.1 percent last month. The modest decline was largely due to an 8.5 percent drop in orders for autos and auto parts. In July, demand for those goods surged 10.2 percent — the biggest increase in eight years. Manufacturing had been one of the leading sectors since the recession officially ended two years ago. But factory growth slowed this spring and summer, partly because of supply disruptions from Japan, but also because consumer demand weakened.
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(AP |Yahoo News |September 28, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In August 2011, average hourly earnings in manufacturing were $18.96 (preliminary), down 0.1 percent from previous month, and up 1.8 percent from August 2010’s $18.63.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-1277,” released September 2, 2011; next release is October 7, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the second-quarter of 2011, hourly compensation from previous quarter, annual rate (revised) was up 3.1 percent in total manufacturing, up 2.4 percent in durable manufacturing and up 4.1 percent in nondurable manufacturing.

  • In the second-quarter of 2011, hourly compensation of all manufacturing workers increased 2.8 percent (revised), compared to a 1.4 percent increase during the second-quarter of 2010. Real hourly compensation in the total manufacturing sector decreased -0.6 percent (revised) in the second-quarter of 2011, compared to -0.4 percent decrease in the second-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2011, Revised,” USDL 11-1276, released September 1, 2011; next release is November 3, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits updated

  • • In the second quarter of 2011, manufacturing profits increased 14.8 percent, or $32.3 billion, to $249.9 billion from $217.6 billion in the first quarter. Compared with second quarter profits of 2010, manufacturing profits were up $12.6 billion in the second quarter of 2011.

  • • Second quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $87.1 billion from the first quarter of 2011 to $945.9 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-49,” released September 29, 2011; next release is October 27, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp2q11_3rd.pdf

       

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Manufacturing Employment

  • In August 2011, manufacturing employment went down, with a decrease of 3,000 jobs.

  • In August, durable goods manufacturing lost 3,000 jobs with decreases in fabricated metal products (-5,400), furniture and related products (-2,600), nonmetallic mineral products (-1,500), electrical equipment and appliances (-800), and primary metals (-500). However, job gain occurred in machinery (3,900), wood products (1,900), computer and electronic products (1,100), transportation equipment (900), and miscellaneous manufacturing (300).

  • In August, employment in nondurable goods manufacturing sector remained at the same level as previous month. Job gained occurred in beverages and tobacco products (3,100), paper and paper products (1,600), apparel (1,100), chemicals (1,100), printing and related support activities (800), and plastics and rubber products (700). Meanwhile, job losses occurred in food manufacturing (-5,200), leather and allied products (-1,400), textile mills (-900), petroleum and coal products (-600), and textile product mills (-400).

  • The manufacturing employment of 11.8 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-11-1277,” released September 2, 2011; next release is October 7, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In August 2011, manufacturing production was up 0.5 percent from previous month and was 3.8 percent above its year-earlier level.

  • Production of durable goods was up 0.8 percent from previous month. The durable industries that registered increases in output included aerospace and miscellaneous transportation equipment (2.2 percent), motor vehicles and parts (1.7 percent), computer and electronic products (1.3 percent), primary metal (1.2 percent), furniture and related products (1.2 percent), electrical equip., appliances, and components (1.0 percent), and miscellaneous (0.5 percent). The durable industries that registered decreases in output included wood products (-0.8 percent), machinery (-0.4 percent), and nonmetallic mineral products (-0.2 percent). The output of fabricated metal products remained unchanged.

  • 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 (1.1 percent), and chemicals (0.2 percent). The nondurable industries that registered decreases in output included textile and product mills (-1.0 percent), printing and support (-0.9 percent), paper (-0.3 percent), apparel and leather (-0.3 percent).,food, beverage, and tobacco products (-0.2 percent), and plastics and rubber products (-0.2 percent).

  • Other manufacturing industries (non-NAICS) was up 0.8 percent.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released September 15, 2011; next release is October 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In August 2011, manufacturing industries (NAICS based) operated at 75.5 percent of capacity, 3.3 percentage points below their 1972-2010 average of 78.8 percent, and 0.2 percent above their revised capacity utilization level in July 2011.

  • In August 2011, durable manufacturing, capacity utilization operated at 74.0 percent capacity, up 0.5 points from previous month. Increased capacity utilization was registered in aerospace and miscellaneous transportation equipment (1.6 points), motor vehicles and parts (1.0 points), primary metals (1.0 points), furniture and related products (1.0 points), electrical equip., appliances, and components (0.8 points), computer and electronic products (0.4 points), miscellaneous (0.2 points), and fabricated metal products (0.1 points). Decreased capacity utilization was registered in wood products (-0.4 points), and machinery (-0.4 points). Meanwhile, capacity utilization was unchanged for nonmetallic mineral products.

  • In August 2011, non-durable manufacturing, capacity utilization operated remained at 77.2 percent. Increased capacity utilization was registered in petroleum and coal products (0.8 points).and chemicals (0.2 points), and decreased capacity utilization was registered in textile and product mills (-0.6 points), printing and support (-0.5 points), food, beverage, and tobacco products (-0.3 points), paper (-0.2 points), and apparel and leather (-0.2 points). Meanwhile, capacity utilization was unchanged for plastics and rubber products.

  • The index for other manufacturing industries (non-NAICS) increased 0.6 points.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released September 15, 2011; next release is October 17, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity fell -1.5 percent in the second-quarter of 2011, as output increased 1.2 percent and hours increased 2.7 percent. Productivity was down -2.7 percent in the durable goods industries and up 1.3 percent in the nondurable goods industries. Unit labor costs in manufacturing increased 4.6 percent in the second-quarter of 2011, and increased 0.4 percent over the last four quarters.

  • In durable goods industries, productivity was down 2.7 percent from previous quarter, as output increased 2.2 percent, and hours worked increased 5.0 percent.

  • In nondurable goods industries, productivity was up 1.3 percent from previous quarter, as output increased 0.3 percent, while hours worked decreased -0.9 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Second-Quarter 2011, Revised,” USDL 11-1276, released September 1, 2011; next release is November 3, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in July were 1.49 percent lower than the previous month. Imports were 1.52 percent lower.

  • Year to date July 2011, U.S. manufactured goods exports accounted for 85.2 percent of all U.S. exports of goods, compared with 86.7 percent a year ago.

  • The year to date July 2011 trade deficit in manufactured goods of $254.1 billion was $39.5 billion more when compared with $214.6 billion a year ago.

    (USA Trade Online, U.S. Census Bureau September 8 data release. Next release is October 13, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in July, up seven of the last eight months, increased $4.7 billion or 2.4 percent to $201.9 billion, revised from the previously published 2.5 percent increase. This followed a 1.1 percent June increase.

  • In July, shipments increased in transportation equipment (8.0 percent), primary metals (3.3 percent), computers and electronic products (2.1 percent), wood products (2.0 percent), and miscellaneous durable goods (1.6 percent). However, shipments decreased in electrical equipment, appliances, and components (-1.8 percent), furniture and related products (-1.8 percent), fabricated metal products (-0.9 percent), machinery (-0.8 percent), and nonmetallic mineral products (-0.2 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-07, CB11-145),” August 31, 2011; next release is October 4, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In August 2011, 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 1.0 percent from previous month.

  • A seasonally adjusted increase of price from July to August was registered in residential gas (0.8 percent). A decrease in price from July to August was registered in liquefied petroleum gas (-6.0 percent), no. 2 diesel fuel (-5.9 percent), home heating oil and distillates (-1.2 percent), gasoline price (-1.0 percent), and residential electric power (-0.1 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-1326,” released September 14, 2011; next release is October 18, 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 August for the 25th consecutive month, and the overall economy grew for the 27th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in August as the PMI registered 50.6 percent, a decrease of 0.3 percentage point when compared to July's reading of 50.9 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 August were: Inventories, 3.0 points increase to 52.3; New Orders, 0.4 points increase to 49.6; Supplier Deliveries, 0.2 points increase to 50.6; Production, 3.7 points decrease to 48.6; and Employment, 1.7 points decrease to 51.8.

    U.S. Industries Reporting Growth in August 2011

    • Wood Products
    • Petroleum & Coal Products
    • Miscellaneous Manufacturing
    • Food, Beverage & Tobacco Products
    • Fabricated Metal Products
    • Paper Products
    • Transportation Equipment
    • Chemical Products
    • Computer & Electronic Products
    • Machinery

    (Institute for Supply Management, data released September 1, 2011; next release is October 3, 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