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Manufacturing Biweekly Update

November 24, 2010 [past updates]


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


Biweekly Notes

Durable goods orders fall sharply in October

New orders for long-lasting U.S. manufactured goods unexpectedly fell in October to post their largest decline in nearly two years and business capital spending plans dropped, according to a government report on Wednesday that pointed to a slowdown in factory activity. The Commerce Department said durable goods orders tumbled 3.3 percent, the largest decline since January 2009, after surging by a revised 5 percent. Economists had expected orders to be flat in October after a previously reported 3.5 percent jump. Durable goods orders are a leading indicator of manufacturing and the report suggested factory activity could be faltering.

(Reuters| November 24, 2010)
www.reuters.com

Manufacturing Growth in New York Region Contracts
Manufacturing in the New York region unexpectedly contracted in November for the first time in more than a year, a warning sign the industry that led the economy out of the recession may again be cooling. The Federal Reserve Bank of New York’s general economic index fell to minus 11.1 from 15.7 in October. Readings less than zero signal contractions in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut. Economists forecast the measure would fall to 14 this month, according to the median projection in a Bloomberg News survey.

(Bloomberg| November 15, 2010)
www.bloomberg.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In October 2010, average hourly earnings in manufacturing were $18.68 (preliminary), up 0.21 percent from September 2010’s $18.64 (preliminary), and up 1.5 percent from October 2009’s $18.41.

    (BLS/DOL Employment data from “The Employment Situation, USDL 10-1519,” released November 5, 2010; next release is December 3, 2010)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • During the third quarter of 2010, hourly compensation from previous quarter, annual rate (preliminary) was up 0.1 percent in total manufacturing, down 1.0 percent in durable manufacturing and up 1.6 percent in nondurable manufacturing.

  • In the third quarter of 2010, hourly compensation of all manufacturing workers decreased 0.9 percent, compared to a 5.2 percent increase during the third quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 2.1 percent in the third quarter of 2010, compared to 6.9 percent increase in the third quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2010, Preliminary,” USDL 10-1518, released November 4, 2010; next release is December 1, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits updated

  • In the second quarter of 2010, manufacturing profits increased 10.7 percent, or $26.7 billion, to $277.1 billion from $250.4 billion in the first quarter. Compared with second quarter profits of 2009, manufacturing profits were up $137.4 billion in the second quarter of 2010. (Note: The manufacturing profits for third quarter 2010 will be updated in the next release.)

  • Third quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 1.7 percent from the second quarter of 2010 to $1,051.6 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-54,” released November 23, 2010; next release is December 22, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_2nd.pdf

       

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Manufacturing Employment

  • In October, 2010, manufacturing employment went down, with a decrease of 7,000 jobs.

  • In October, durable goods manufacturing lost 3,000 jobs with decrease in primary metals (-1,500), wood products (-1,500), and furniture and related products (-1,500), miscellaneous manufacturing (-600), electrical equipment and appliances (-500), and nonmetallic mineral products (-400). Job gains occurred in machinery (1,400), transportation equipment (1,100), fabricated metal products (900), and computer and electronic products (400).

  • In October, nondurable goods manufacturing lost 400 jobs, with decreases in food manufacturing (-2,700), chemicals (-2,000),plastics and rubber products (-1,900), textile product mills (-1,700), printing and related support activities (-1,300), and paper and paper products (-200).Job gains occurred in apparel (2,100), beverages and tobacco products (1,900), petroleum and coal products (1,900), leather and allied products (400), and textile mills (200).

  • The manufacturing employment of 11.7 million workers represents 8.9 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-10-1519,” released November 5, 2010; next release is December 3, 2010) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production updated

  • In October 2010, manufacturing production was up 0.5 percent from previous month and was 6.1 percent above its year-earlier level.

  • Production of durable goods was up 0.9 percent from previous month. The durable industry that registered increases in output included wood products (2.5 percent), electrical equip., appliances and components (2.2 percent), nonmetallic mineral products (2.0 percent), motor vehicles and parts (1.6 percent), machinery (1.4 percent), furniture and related products (0.8 percent), computer and electronic products (0.7 percent), miscellaneous (0.5 percent), fabricated metal products (0.3 percent), and aerospace and miscellaneous transportation equipment (0.2 percent). Primary metal (-0.4 percent) is the only durable manufacturing industries that registered decrease in output.

  • Production of nondurable goods was up 0.2 percent from previous month. The nondurable manufacturing industries that registered increases in output included apparel and leather (2.4 percent), food, beverage, and tobacco products (0.8 percent), paper (0.6 percent), and plastics and rubber products (0.2 percent). The nondurable industry that registered decreases in output included petroleum and coal products (-0.7 percent), printing and support (-0.6 percent), textile and product mills (-0.2 percent), and chemical (-0.1 percent).

  • Index for other manufacturing industries (non-NAICS) remained the same.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released November 16, 2010; next release is December 15, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In October 2010, manufacturing industries (NAICS based) operated at 73.0 percent of capacity, 6.0 percentage points below their 1972-2009 average of 79.0 percent and 0.4 percent points higher than their revised capacity utilization level in September 2010.

  • In October 2010, durable manufacturing, capacity utilization operated at 70.7 percent capacity, up 0.5 points from previous month (revised). Increased capacity utilization was registered in wood products (1.9 points), electrical equip., appliances, and components (1.7 points), nonmetallic mineral products (1.2 points), machinery (1.1 points), motor vehicles and parts (1.1 points), furniture and related products (0.8 points),fabricated metal products (0.3 points), miscellaneous (0.1 points), and computer and electronic products (0.1 points). Decreased capacity utilization was demonstrated in primary metal (-0.4 points). There was no change in capacity utilization in aerospace and miscellaneous transportation equipment.

  • In October 2010, non-durable manufacturing, capacity utilization increased 0.2 percentage points in from previous month (revised) to 75.8 percent. Increased capacity utilization was registered in apparel and leather (2.4 points), food, beverage, and tobacco products (0.6 points), paper (0.6 points), textile and product mills (0.1 points), and plastics and rubber products (0.1 points). Decreased capacity utilization was only registered in petroleum (-0.5 points), and printing and support (-0.2 points). There was no change in capacity utilization in Chemical.

  • The index for other manufacturing industries (non-NAICS) remained unchanged.

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

       

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Manufacturing Productivity

  • Manufacturing sector productivity (premilinary) rose 0.4 percent in the third quarter of 2010, as output increased 4.0 percent and hours increased 3.6 percent. Productivity was down 0.8 percent in the durable goods industries and up 2.9 percent in the nondurable goods industries. Unit labor costs in manufacturing declined 0.3 percent in the third quarter of 2010 and fell 4.6 percent over the last four quarters.

  • In durable goods industries, productivity (preliminary) was down 0.8 percent from previous quarter, as output increased 5.6 percent, while hours worked also increased 6.4 percent.

  • In nondurable goods industries, productivity (preliminary) was up 2.9 percent from previous quarter, as output increased 2.2 percent, while hours worked also decreased 0.7 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2010 Preliminary,” USDL 10-1518, released November 4, 2010; next release is December 1, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Year to date September 2010, U.S. manufactured goods exports accounted for 80.9 percent of all U.S. exports of goods, compared with 81.8 percent a year ago.

  • Manufactured goods exports in September were 0.9 percent higher than the previous month. Imports were down 1.0 percent.

  • The year to date September 2010 trade deficit in manufactured goods of $297.8 billion was $67.6 billion more when compared with $230.1 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-173, BEA10-52, FT-900(10-09),” released November 10, 2010; next release is December 10, 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 October, also down two of the last three months, decreased $1.8 billion or 0.9 percent to $196.8 billion. This followed a 0.1 percent September increase.

  • In October, shipments increased in electrical equipment, appliances, components (0.2 percent), and fabricated metal products (0.2 percent). Shipment decreased in machinery (-3.6 percent), computer and electronic products (-1.9 percent), transportation equipment (-0.7 percent), and primary metals (-0.4 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-10, CB10-176),” November 24, 2010; next release is December 23, 2010)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices updated

  • In October 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, decreased by 0.6 percent compared to previous month.

  • The index for finished energy goods was up 3.7 percent from previous month.

  • A seasonally adjusted increase of price from September to October was registered in liquefied petroleum gas (10.4 percent), gasoline price (9.8 percent), No. 2 diesel fuel (5.6 percent), home heating oil and distillates (5.1 percent). However, a seasonally adjusted decrease of price was registered in residential gas (-2.2 percent), and residential electric power (-1.1 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-1599,” released November 16, 2010; next release is December 14, 2010)
    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 October for the 15th consecutive month, and the overall economy grew for the 18th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in October, and at an accelerated rate as the PMI registered 56.9 percent, an increase of 2.5 percentage points when compared to September's reading of 54.4 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 October were: New Orders increased 7.8 points to 58.9, Production increased 6.2 points to 62.7, Employment up 1.2 points to 57.7, Inventories down 1.7 points to 53.9, and Supplier Deliveries down 1.1 points to 51.2.

    U.S. Industries Reporting Growth in October 2010

    • Apparel, Leather & Allied Products
    • Primary Metals
    • Petroleum & Coal Products
    • Machinery
    • Electrical Equipment, Appliances & Components
    • Miscellaneous Manufacturing
    • Fabricated Metal Products
    • Paper Products
    • Printing & Related Support Activities
    • Transportation Equipment
    • Computer & Electronic Products
    • Food, Beverage & Tobacco Products
    • Plastics & Rubber Products
    • Chemical Products

    (Institute for Supply Management, data released November 1, 2010; next release is December 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