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Manufacturing Biweekly Update

November 28, 2011 [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 down up
Exports up up
Goods Shipments down up


Biweekly Notes

US Midwest Manufacturing Rises, Led By Autos

Manufacturing output in the U.S. Midwest rose 0.7% in October as the region's auto sector continued to outperform the nation, though steel output fell for the second consecutive month. The Federal Reserve Bank of Chicago said Monday that its Midwest Manufacturing Index rose to a seasonally-adjusted 85.5 in October--the highest level in three years--after the September reading was revised down to 84.9. The index is calculated using data on working hours, and output in the five- state Midwest region--still the nation's manufacturing heartland--has broadly outperformed the national average over the past 12 months, led by the auto sector's rebound and a booming machinery export market.
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(NASDAQ |November 28, 2011)

New home sales rise 1.3 percent in October

New single-family home sales rose in October and the supply of homes on the market fell to its lowest level since April of last year, showing some healing in the battered housing sector. The Commerce Department on Monday said that sales edged up 1.3 percent to a seasonally adjusted 307,000-unit annual rate, which was the fastest pace in five months yet still below analysts' expectations. The supply of new homes in the market would last 6.3 months at the current pace of sales. The data fueled hopes the market for homes could at least be bottoming out following the previous decade's boom and bust in the housing sector. "This looks like a bottom. The market is stabilizing," said Gregory Miller, an economist at Suntrust Bank in Atlanta.
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(Reuters| November 28, 2011)

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In October 2011, average hourly earnings in manufacturing were $19.01 (preliminary), up 0.5 percent from previous month, and up 1.6 percent from October 2010’s $18.71.

    (BLS/DOL Employment data from “The Employment Situation, USDL 11-1576,” released November 4, 2011; next release is December 2, 2011)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

Manufacturing Wage Rates (Quarterly, Yearly)

  • In the third-quarter of 2011, hourly compensation from previous quarter, annual rate (preliminary) was up 0.6 percent in total manufacturing, up 1.7 percent in durable manufacturing and down -1.4 percent in nondurable manufacturing.

  • In the third-quarter of 2011, hourly compensation of all manufacturing workers increased 2.5 percent, compared to a 1.4 percent increase during the third-quarter of 2010. Real hourly compensation in the total manufacturing sector decreased -1.2 percent in the third-quarter of 2011, compared to 0.2 percent increase in the third-quarter of 2010.

    (BLS/DOL Productivity data from “Productivity and Costs, Third Quarter 2011, Preliminary” USDL 11-1575, released November 3, 2011; next release is November 30, 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. (to be updated on next release)

  • Third quarter 2011 profits for all non-financial industries (manufacturing being a subcategory) increased $21.1 billion from the second quarter of 2011 to $967.0 billion.

    (BEA/DOC GDP data from “Gross Domestic Product, BEA 11-55,” released November 22, 2011; next release is December 22, 2011)
    http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp3q11_2nd.pdf

       

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Manufacturing Employment

  • In October 2011, manufacturing employment went up, with an increase of 5,000 jobs.

  • In October, durable goods manufacturing gained 11,000 jobs with increases in transportation equipment (9,500), machinery (3,900), primary metals (2,300), fabricated metal products (600), electrical equipment and appliances (500), and wood products (200). However, job loss occurred in miscellaneous manufacturing (-2,400), furniture and related products (-1,100), computer and electronic products (-1,100), and nonmetallic mineral products (-800).

  • In October, employment in nondurable goods manufacturing sector lost 6,000 jobs with decreases in chemicals (-2,800), printing and related support activities (-1,900), plastics and rubber products (-1,600), textile mills (-1,100), beverages and tobacco products (-900), and textile product mills (-600). Meanwhile, job gain occurred in petroleum and coal products (1,300), food manufacturing (700), apparel (500), paper and paper products (400), and leather and allied products (200).

  • The manufacturing employment of 11.8 million workers represents 8.9 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-11-1576,” released November 4, 2011; next release is December 2, 2011) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production UPDATED

  • In October 2011, manufacturing production was up 0.5 percent from previous month and was 4.1 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 motor vehicles and parts (3.1 percent), aerospace and miscellaneous transportation equipment (2.1 percent), electrical equip., appliances, and components (2.0 percent), computer and electronic products (0.8 percent), fabricated metal products (0.5 percent), and primary metal (0.2 percent). The durable industries that registered decreases in output included wood products (-2.2 percent), nonmetallic mineral products (-2.0 percent), machinery (-0.5 percent), and furniture and related products (-0.4 percent).

  • Production of nondurable goods was up 0.2 percent from the previous month. The nondurable manufacturing industries that registered increases in output included apparel and leather (2.8 percent), food, beverage, and tobacco products (0.9 percent), plastics and rubber products (0.7 percent), and chemicals (0.1 percent). The nondurable industries that registered decreases in output included petroleum and coal products (-0.9 percent), printing and support (-0.7 percent), textile and product mills (-0.3 percent), and paper (-0.3 percent).

  • Other manufacturing industries (non-NAICS) was down (-0.2 percent).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released November 16, 2011; next release is December 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization UPDATED

  • In October 2011, manufacturing industries (NAICS based) operated at 75.9 percent of capacity, 2.9 percentage points below their 1972-2010 average of 78.8 percent, and 0.3 percentage points above their revised capacity utilization level in September 2011.

  • In October 2011, durable manufacturing, capacity utilization operated at 74.6 percent capacity, up 0.4 points from previous month. Increased capacity utilization was registered in electrical equip., motor vehicles and parts (1.8 points), appliances, and components (1.7 points), aerospace and miscellaneous transportation equipment (1.5 points), fabricated metal products (0.5 points), and primary metals (0.2 points), Decreased capacity utilization was registered in wood products (-1.3 points), nonmetallic mineral products (-1.0 points), machinery (-0.5 points), furniture and related products (-0.2 points), and miscellaneous (-0.1 points). Meanwhile, capacity utilization was unchanged for computer and electronic products.

  • In October 2011, non-durable manufacturing, capacity utilization operated 77.5 percent capacity, up 0.2 from previous month. Increased capacity utilization was registered in apparel and leather (1.9 points), plastics and rubber products (0.7 points), food, beverage, and tobacco products (0.5 points), and chemicals (0.1 points). Decreased capacity utilization was registered in petroleum and coal products (-0.9 points), printing and support (-0.5 points), paper (-0.2 points), and textile and product mills (-0.2 points).

  • The index for other manufacturing industries (non-NAICS) decreased (-0.1 points).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released November 16, 2011; next release is December 15, 2011)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity

  • Manufacturing sector productivity was up 5.4 percent in the third-quarter of 2011, as output increased 4.7 percent and hours decreased -0.8 percent. Productivity was up 9.9 percent in the durable goods industries and up 0.7 percent in the nondurable goods industries. Unit labor costs in manufacturing decreased -4.6 percent in the third-quarter of 2011, and increased -0.5 percent over the last four quarters.

  • In durable goods industries, productivity was up 9.9 percent from previous quarter, as output increased 8.3 percent, while hours worked decreased -1.4 percent.

  • In nondurable goods industries, productivity was up 0.7 percent from previous quarter, as output increased 1.0 percent, and hours worked increased 0.4 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Third-Quarter 2011, Preliminary,” USDL 11-1575, released November 3, 2011; next release is November 30, 2011)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Manufactured goods exports in September were 1.10 percent higher than the previous month. Imports were 2.69 percent lower.

  • Year to date September 2011, U.S. manufactured goods exports accounted for 85.5 percent of all U.S. exports of goods, compared with 86.8 percent a year ago.

  • The year to date September 2011 trade deficit in manufactured goods of $334.1 billion was $35.4 billion more when compared with $298.7 billion a year ago.

    (USA Trade Online, U.S. Census Bureau November 10 data release. Next release is December 9, 2011)
    http://www.usatradeonline.gov/

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in September, down following four consecutive monthly increases, decreased $1.3 billion or 0.6 percent to $200.2 billion, revised from the previously published 0.7 percent decrease. This followed a 0.1 percent August increase.

  • In September, shipments increased fabricated metal products (1.2 percent), primary metals (1.1 percent), miscellaneous durable goods (1.0 percent), and nonmetallic mineral products (0.1 percent).However, shipments decreased in transportation equipment (-2.4 percent), machinery (-1.2 percent), computers and electronic products (-1.2 percent), furniture and related products (-0.9 percent), electrical equipment, appliances, and components (-0.4 percent), and wood products (-0.2 percent).

    (Census Bureau/DOC data from “Full Report on Manufacturers’ Shipments, Inventories and Orders (M3-2(11)-09, CB11-182),” November 3, 2011; next release is December 5, 2011)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices UPDATED

  • In October 2011, the Producer Price Index (PPI) for finished goods, except foods and energy, remained at its previous monthly level.

  • The index for finished energy goods was down 1.4 percent from previous month.

  • A seasonally adjusted increase of price from September to October was registered in residential electric power (1.1 percent). A decrease in price from September to October was registered in home heating oil and distillates (-6.0 percent), no. 2 diesel fuel (-5.5 percent), residential gas (-3.3 percent), gasoline price (-2.4 percent), and liquefied petroleum gas (-2.2 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 11-1643,” released November 15, 2011; next release is December 15, 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 October for the 27th consecutive month, and the overall economy grew for the 29th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued its growth in October as the PMI registered 50.8 percent, a decrease of 0.8 percentage point when compared to September's reading of 51.6 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 +2.8 points increase to 52.4; Supplier Deliveries, -0.1 points decrease to 51.3; Employment, -0.3 points decrease to 53.5; Production, -1.1 points decrease to 50.1; and Inventories, -5.3 points decrease to 46.7;

    U.S. Industries Reporting Growth in September 2011

    • Computer & Electronic Products
    • Petroleum & Coal Products
    • Food, Beverage & Tobacco Products
    • Nonmetallic Mineral Products
    • Primary Metals
    • Fabricated Metal Products
    • Paper Products
    • Machinery

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