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Manufacturing Biweekly Update

December 29, 2006 (Past Updates)

 

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

 

Biweekly Notes

Ensuring Safe and Timely Entry of Shipments to the United States

The Megaports and FAST programs are used at ports of entry to improve port security and prevent nuclear-related smuggling . DOE’s National Nuclear Security Agency has partnered with a number of governments in Europe, Asia, the Middle East, Latin America and the Caribbean to implement the programs. The goal of Megaports is stopping illicit shipments of nuclear and other radioactive material through the installation of radiation monitoring equipment at non-U.S. borders, seaports, airports and nuclear facilities, mostly in the former Soviet Union . FAST stands for Free and Secure Trade Program. It is a joint initiative of the U.S. Customs and Border Protection and Canadian and Mexican customs authorities. It provides importers with expedited release for qualifying commercial shipments.

Sources: National Nuclear Security Administration, Department of Energy, Tel. 202-586-0513, Megaports Program Mgr.) E-mail: William.Kilmartin@doe.gov; and FAST page.

 

U.S. Manufacturing Key Stats

Manufacturing Wage Rates

Manufacturing Profits

BEA’s estimates of manufacturing profits for the third quarter of 2006 were up over the previous quarter and over the previous year. Manufacturing profits for the third quarter of 2006 rose 14.5 percent or $42.0 billion to $331.9 billion from $289.9 billion of the second quarter. In comparison to the third quarter of 2005, corporate profits for manufacturing rose $71.2 billion or 27.3 percent since the third quarter of 2005 and were above corporate profits at the end of 2005. Third quarter profit estimates were available for all Non-financial industries, manufacturing being a subcategory. BEA annualized profits for all of these industries were currently reported at $1,081.0 billion, up 7.6 percent from the second quarter of this year and up 19.6 percent from the third quarter of last year. [Profits Data; Quarterly Change Data; Graph]

(BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 06-58,” released December 29, 2006; next release is January 31, 2007)Current GDP Data; Archived GDP Data

Manufacturing Employment

In November 2006, manufacturing employment decreased 15,000 to 14.2 million from October. The decline was reported in both durable and non-durable sub-sectors. Within durable goods, employment continued to decline in industries, such as Wood Products (-5,900), Furniture and Related Products (-5,200), and Motor Vehicles and Parts (-7,000). However, employment increased in Computer and Electronic Products (5,000). For non-durable goods, job losses registered in Paper and Paper Products (-1,200), and Textile Mills (-1,400). Since July 2006, manufacturing employment has declined by 72,000. Nonetheless, manufacturing employs 14.2 million workers and represents 10.4 percent of total non-farm employment. [Employment Data; Monthly Change Data; Annual Change Data; Graph]

(BLS/DOCEmployment data from “The Employment Situation November 2006, USDL 06-2041,” released December 8, 2006; next release is January 5, 2007) Current Employment Data; Archived Employment Data

Manufacturing Production

In November 2006, manufacturing output increased 0.3 percent from October, reflecting a 0.7 percent increase in durable and no change in non-durable manufacturing. In durable manufactures, Motor Vehicles and Parts rose 3.7 percent with a decline of 2.4 percent from its year ago level. Conversely, Computer and Electronic Products increased 1.5 percent in this current month and 19.1 percent over a year ago. Also, on the rise in production were Aerospace and Miscellaneous Durables. Among non-durable goods, industries that had small increases in November were Textile & Product Mills and Plastics & Rubber Products, while Petroleum and Coal Products output declined. In slight transition from the October performance, in general, the manufactures output index seems to be moving in the same direction as its 4.6 percent trend from last year. [Production Data; Monthly Change Data; Annual Change Data; Graph]

(Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released December 15, 2006; next release is January 17, 2007) Current and Archived Federal Reserve Statistical Data

Manufacturing Capacity Utilization

U.S. manufacturing industries operated at 80.2 percent of capacity in November 2006, a rate 0.9 percent higher than their 1972-2005 average of 79.5 percent and 0.2 percentage points above capacity utilization in October 2006. Durable manufacturing capacity utilization also was up 0.2 percentage points from October to 79.8 percent. Decreases in capacity utilization for the Wood Products, Primary Metal, Nonmetallic Mineral Products, Fabricated Metal products, Furniture & Related Products industries (ranging from 2.6 to 0.5 percentage points) accounted for the lower capacity utilization in Durable Manufacturing while Other Durable Manufacturing trended upward. Capacity utilization in Non-durable Manufacturing was down 0.1 percentage point to 81.8 percent from October. Non-durable Manufacturing industries were at lower capacity utilization except Textile & Product Mills and Plastics & Rubber Products industries. Non-durable manufacturing industries down by more than the industry-average were Food, Beverage & Tobacco Products, Apparel & Leather, and Chemicals, down 0.1, 2.8, and 3.4 percentage points, respectively. [Production Data; Monthly Change Data; Annual Change Data; Graph]

(Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released December 15, 2006; next release is January 17, 2007) Current and Archived Federal Reserve Statistical Data

Manufacturing Productivity

Manufacturing productivity rose 6.7 percent in the third quarter of 2006, as output increased 5.1 percent and hours of all workers fell 1.6 percent (seasonally adjusted annual rates). This was the largest quarterly gain in productivity since the third quarter of 2003. In the second quarter, productivity rose 2.7 percent, reflecting a 5.1 percent rise in output and a 2.3 percent increase in hours. In durable goods industries, productivity increased 9.0 percent in the third quarter of 2006, as an increase of 5.9 percent in output combined with a 2.9 percent decrease in hours. Productivity grew more slowly in the nondurable goods industries, 3.1 percent, reflecting increases of 3.9 percent in output and 0.8 percent in hours. Strong productivity growth has resulted in the decline in manufacturing employment. [Productivity Data; Quarterly Change Data; Annual Change Data; Graph]

(BLS/DOL Productivity data from “Productivity and Costs, USDL 06-2039,”released December 5, 2006; next release is February 7, 2007) 3rd Quarter Productivity News Release ; Archived Productivity News Releases

Manufacturing Trade

For the first ten months of 2006, U.S. manufactured goods exports accounted for 64.2 percent of all U.S. exports of goods and services. During that same period, manufactures exports were 14.4 percent above year ago levels, while imports were up 10.8 percent. The trade deficit in manufactures increased to $562.8 billion (annual rate) for 2006, up from $534.3 billion a year ago.

(Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB06-180, BEA06-54, FT 900,” released December 12, 2006; next release is January 10, 2007) Current Foreign Trade Press Release; Historical Foreign Trade Press Releases

Manufactured Goods Shipments

Shipments of manufactured durable goods in November 2006 (preliminary) increased $0.2 billion or 0.1 percent from October to $209.6 billion. This followed a 0.3 percent September increase. Computers and Electronic Products had the largest percent change, 2.6 percent, increasing about $900 million to $35.7 billion. Manufactured goods shipments were up 6.3 percent from November 2005, with shipments of Non-defense Aircraft and Parts as the largest percentage annual gain, up 27.4 percent from shipments in November 2005 (having no currently reported monthly change). ). [MGS Data; Graph]

(Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, CB06-174” released December 22, 2006; next release is January 4, 2007) Current and Archived Durable Goods Press Release

Manufactured Goods Prices

Manufactured Goods Prices typically rebounded in November against the declines registered in October. The producer price index for finished goods, except foods and energy, increased 1.3 percent in November 2006, after falling 0.9 percent in October – a net increase of 0.4 percent from September. Similarly, t he finished energy goods price index rose 6.1 percent in November 2006, offsetting the 5.0 percent decline in October, a net increase of 0.6 percent from September. Finally, the index for finished consumer goods except foods and energy increased 1.1 percent in November 2006, offsetting the 0.8 percent downturn in previous month – a net increase of 0.3 percent from September. [Price Index Data; Annual Change Data]

(BLS/DOL data from “Producer Price Indexes,” released December 19, 2006; next release is January 17, 2007) November 2006 Producer Price Index; Archived Producer Price Indexes

Institute for Supply Management’s (ISM) Index

In November 2006, the Index of Manufacturing Production was 49.5 percent, 1.7 percentage points lower than the 51.2 percent reported in October. An Index above 50 points indicates that the manufacturing economy is generally expanding; below 50 points indicates that it is generally contracting .

Manufacturing activity in November had declined to its lowest level in 42 months as manifested by the recent index. The last time the PMI registered below 50 percent was April 2003 (46.5 percent). The components of the index counter to the overall November figure were Prices (+6.5%), Supplier Deliveries (+2.6%), Orders Backlog (+2.0%), and Inventories (+0.3%).

 

Institute for Supply Management (ISM) Index

  • In November 2006, the Index of Manufacturing Production was 49.5 percent, 1.7 percentage points lower than the 51.2 percent reported in October. Index reading above 50 points indicates that the manufacturing economy is generally expanding; below 50 points indicates that it is generally contracting.

  • Manufacturing activity in November had declined to its lowest level in 42 months as manifested by the recent index. The last time the PMI registered below 50 percent was April 2003 (46.5 percent). The components of the index counter to the overall November figure were Prices (+6.5%), Supplier Deliveries (+2.6%), Orders Backlog (+2.0%), and Inventories (+0.3%).

U.S. Industries Reporting Growth in October 2006

  • Apparel, Leather and Allied Products
  • Miscellaneous Manufacturing
  • Computer & Electronic Products
  • Printing & Related Support Activities
  • Plastic and Rubber Products
  • Primary Metals
  • Chemical Products
  • Food, Beverage & Tobacco Products

(Institute for Supply Management data released December 1, 2006; next release is January 2, 2007) Current ISM Release; Archived and Current ISM Releases

 

Prepared by: Indu Jasani
Office of Competition and Economic Analysis
International Trade Administration
U.S. Department of Commerce
(202) 482-3699

 
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