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Manufacturing Biweekly Update

November 26, 2012 [past updates]


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


Biweekly Notes

American manufacturing is coming back. Manufacturing jobs aren’t

A new study from the McKinsey Global Institute published Monday morning adds some welcome clarity. In 184 pages, the in-house think tank of the global consulting giant presents a picture of manufacturing as among the most dynamic sectors of the U.S. and global economies, driving higher productivity and standards of living. But it also shows that what we usually think of as a traditional manufacturing job isn’t coming back. It is a story of robotics and other technologies improving at a remarkable rate, eliminating the need for factory floors crowded with workers doing manual labor. Rather, at least 30 percent of “manufacturing jobs” are things that would look to most people like white-collar service jobs: Sales, engineering, design, that sort of thing. In other words, the manufacturing worker of the future is more likely to have a graduate degree and wear a suit or a labcoat to work than to have only a high school education and carry a lunch pail.

(Washington Post| November 19, 2012)
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At Work: Manufacturing jobs returning to U.S.

The automobile industry isn't the only one with jobs for people who like to make things. Who would have thought that jobs like metal-refining furnace operators and tenders would be making a comeback in the year 2012? But they are. Such jobs, done by folks who "operate or tend furnaces … to melt and refine metal before casting or to produce specified types of steel," as defined by the Bureau of Labor Statistics, have increased 16% from 2010 to 2012 after declining 16% from 2007 to 2009. That's according to a study conducted by CareerBuilder and Economic Modeling Specialists International that tracked U.S. labor trends and includes data from more than 90 national and state sources. Overall, job growth has increased by double digits in the past two years in these industries: Internet publishing and broadcasting and Web search portals — a 30% growth; Drilling of oil and gas wells, up 29%; Electronic shopping, up 23%; Crude petroleum and natural gas extraction, up 21%; Temporary help services, up 21%; Machine shops, up 18%; Marketing consulting services, up 13%; Computer systems design services, up 12%; Specialized freight, up 11%; Home health care services, up 10%.

(USAToday |November 24, 2012)
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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In October 2012, average hourly earnings in manufacturing were $19.15 (preliminary), up 0.16 percent from previous month, and up 0.79 percent from October 2011’s $19.00.

    (BLS/DOL Employment data from “The Employment Situation, USDL 12-2164,” released November 2, 2012; next release is December 7, 2012)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the third-quarter of 2012, hourly compensation from previous quarter, annual rate (preliminary) was up (+1.2 percent) in total manufacturing, up (+0.2 percent) in durable manufacturing and up (+2.9 percent) in nondurable manufacturing.

  • In the third-quarter of 2012, hourly compensation of all manufacturing workers increased (+0.6 percent), compared to a (+2.7 percent) increase during the third-quarter of 2011. Real hourly compensation in the total manufacturing sector decreased (-1.1 percent) in the third-quarter of 2012, compared to (-1.0 percent) decrease in the third-quarter of 2011.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2012,” USDL 12-2163, released November 1, 2012; next release is December 5, 2012)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits

  • In the second quarter of 2012, manufacturing profits increased 2.6 percent, or $9.3 billion, to $372.8 billion from $363.5 billion in the first quarter. Compared with second quarter profits of 2011, manufacturing profits were up $143.6 billion in the second quarter of 2012.

  • Second quarter 2012 profits for all non-financial industries (manufacturing being a subcategory) increased $29.0 billion from the first quarter to $1245.8 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 12-44,” released September 27, 2012; next release is October 26, 2012)
    http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp2q12_3rd.pdf

           

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    Manufacturing Employment

    • In October 2012, manufacturing employment went up, with an increase of 13,000 jobs.

    • In October, durable goods manufacturing gained 5,000 jobs with increases in wood products (+2,700), computer and electronic products (+1,600), transportation equipment (+1,400), nonmetallic mineral products (+1,400), and primary metals (+1,000). However, job loss occurred in fabricated metal products (-1,200), machinery (-1,100), miscellaneous manufacturing (-1,000), electrical equipment and appliances (-100), and furniture and related products (-100).

    • In October, nondurable goods manufacturing gained 8000 jobs with increases in food manufacturing (+3,700), chemicals (+1,600), plastics and rubber products (+1,600), beverages and tobacco products (+1,500), printing and related support activities (+900), petroleum and coal products (+600), textile product mills (+400), and apparel (+100). However, job loss occurred in paper and paper products (-900), textile mills (-800), and leather and allied products (-400).

    • The manufacturing employment of 12.0 million workers represents 8.9 percent of total non-farm employment.

      (BLS/DOL Employment data from “The Employment Situation, USDL 12-2164,” released November 2, 2012; next release is December 7, 2012) http://www.bls.gov/news.release/pdf/empsit.pdf

           

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    Manufacturing Production Updated

    • In October 2012, manufacturing production was down (-0.9 percent) from previous month and was up (+1.6 percent) above its year-earlier level.

    • In October 2012, production of durable goods was down (-0.6 percent) from the previous month. The durable industries that registered decreases in output included machinery (-1.9 percent), electrical equip., appliances, and components (-1.4 percent), fabricated metal products (-0.7 percent), furniture and related products (-0.6 percent), miscellaneous manufactured product (-0.4 percent), nonmetallic mineral products (-0.4 percent), computer and electronic products (-0.3 percent), primary metals (-0.2 percent), aerospace and miscellaneous transportation equipment (-0.1 percent), and motor vehicles and parts (-0.1 percent). The durable industry that registered increase in output was wood products (+0.1 percent).

    • In October 2012, production of nondurable goods was down (-1.0 percent) from the previous month. The nondurable industries that registered decreases in output included apparel and leather (-2.1 percent), food, beverage and tobacco products (-1.8 percent), printing and support (-1.5 percent), paper (-1.2 percent), petroleum and coal products (-0.9 percent), textile and product mills (-0.5 percent), and chemicals (-0.3 percent). The durable industry that registered increase in output was plastics and rubber products (+0.2 percent).

    • In October 2012, production of other manufacturing goods (non-NAICS) was down (-3.4 percent).

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released November 16, 2012; next release is December 14, 2012)
      http://www.federalreserve.gov/releases/g17/Current/g17.pdf

           

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    Manufacturing Capacity Utilization Updated

    • In October 2012, manufacturing industries (NAICS based) operated at 76.6 percent of capacity, down (-0.7 points) from previous month, and down (-2.1 percentage points) below their 1972-2011 average of 78.7 percent.

    • In October 2012, durable manufacturing, capacity utilization operated at 75.8 percent capacity, down (-0.6 percentage points) from the previous month. Decreased capacity utilization was registered in machinery (-1.8 points), electrical equip., appliances, and components (-1.2 points), fabricated metal products (-0.7 points), miscellaneous (-0.7 points), computer and electronic products (-0.5 points), motor vehicles and parts (-0.4 points), furniture and related products (-0.3 points), aerospace and miscellaneous transportation equipment (-0.2 points), and primary metals (-0.1 points). Increased capacity utilization was registered in wood products (+0.1 points). There was no change of capacity utilization in nonmetallic mineral products.

    • In October 2012, non-durable manufacturing, capacity utilization operated 77.5 percent capacity, down (-0.8 points) from the previous month. Decreased capacity utilization was registered in food, beverage, and tobacco products (-1.6 points), apparel and leather (-1.3 points), printing and support (-1.0 points), paper (-0.8 points), petroleum and coal products (-0.4 points), chemicals (-0.4 points), and textile and product mills (-0.2 points). There was no change of capacity utilization in plastics and rubber products.

    • The index for other manufacturing industries (non-NAICS) was down (-1.9 points).

      (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released November 16, 2012; next release is December 14, 2012)
      http://www.federalreserve.gov/releases/g17/Current/g17.pdf

           

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    Manufacturing Productivity

    • Manufacturing sector productivity (preliminary) was down (-0.4 percent) in the third-quarter of 2012, as output decreased (-0.6 percent) and hours decreased (-0.2 percent). Productivity was down (-0.7 percent) in the durable goods industries and down (-0.1 percent) in the nondurable goods industries. Unit labor costs in manufacturing increased (+1.5 percent) in the third-quarter of 2012, and decreased (-0.8 percent) over the last four quarters.

    • In durable goods industries, productivity was down (-0.7 percent) from previous quarter, as output decreased (-1.0 percent), while hours worked decreased (-0.4 percent).

    • In nondurable goods industries, productivity was down (-0.1 percent) from previous quarter, while output remained the same, and hours worked increased (+0.1 percent).

      (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2012,” USDL 12-2163, released November 1, 2012; next release is December 5, 2012)
      http://www.bls.gov/news.release/pdf/prod2.pdf

           

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    Manufacturing Trade

    • Manufactured goods exports in September 2012 were (-0.50 percent) lower than the previous month. Imports were (-4.26 percent) lower.

    • Year-to-date September 2012, U.S. manufactured goods exports accounted for 87.4 percent of all U.S. exports of goods, compared with 86.1 percent a year ago.

    • The year-to-date September 2012 trade deficit in manufactured goods of $339.1 billion was $10.2 billion more when compared with $329.0 billion a year ago.

      (USA Trade Online, U.S. Census Bureau, released November 8, 2012; Next release is December 11, 2012)
      http://www.usatradeonline.gov/

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    Manufactured Goods Shipments

    • New orders for manufactured goods in September, up two of the last three months, increased $22.0 billion or 4.8 percent to $475.4 billion, the U.S. Census Bureau reported today. This followed a 5.1 percent August decrease. Excluding transportation, new orders increased 1.4 percent.

    • In September, shipments increased in computers and electronic products (+2.2 percent), primary metals (+1.3 percent), miscellaneous durable goods (+1.3 percent), transportation equipment (+1.1 percent), and fabricated metal products (+0.2 percent). However, shipments decreased in wood products (-1.3 percent), electrical equipment, appliances, and components (-0.7 percent), nonmetallic mineral products (-0.3 percent), furniture and related products (-0.1 percent), and machinery (-0.1 percent),

      (Census Bureau/DOC data from “Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(12)-8, CB12-187),” October 4, 2012; next release is November 2, 2012)
      http://www.census.gov/manufacturing/m3/

           

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    Manufactured Goods Prices Updated

    • In October 2012, the Producer Price Index (PPI) for finished goods, except foods and energy, decreased by -0.2 compared to previous month.

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

    • A seasonally adjusted increase in price from September to October was registered in no. 2 diesel fuel (+2.2 percent), residential electric power (+1.6 percent), and residential gas (+0.2 percent). A decrease in price was registered in home heating oil and distillates (-3.3 percent), gasoline (-2.2 percent), and liquefied petroleum gas (-0.3 percent).

      (BLS/DOL data from “Producer Price Indexes, USDL 12-2258,” released November 14, 2012; next release is December 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 expanded in October for the second consecutive month following three months of slight contraction, and the overall economy grew for the 41st consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

    • Manufacturing expanded in October as the PMI™ registered 51.7 percent, an increase of 0.2 percentage point when compared to September's reading of 51.5 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 September were Production, +2.9 points increase to 52.4; New Orders +1.9 points increase to 54.2; Employment, -2.6 points decrease to 52.1; Supplier Deliveries, -0.7 points decrease to 49.6; and Inventories, -0.5 points decrease to 50.0.

      U.S. Industries Reporting Growth in September 2012

      • Petroleum & Coal Products
      • Furniture & Related Products
      • Apparel, Leather & Allied Products
      • Paper Products
      • Miscellaneous Manufacturing
      • Food, Beverage & Tobacco Products
      • Plastics & Rubber Products
      • Chemical Products.

      (Institute for Supply Management, data released November 1, 2012; next release is December 3, 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