Manufacturing Biweekly Update
November 3, 2006 (Past Updates)
| U.S. Manufacturing Trends |
Current Period |
Year-to-Date |
Previous Year |
| Wage Rates |
 |
|
|
| Profits |
 |
|
|
| Employment |
|
|
|
| Production |
|
|
|
| Capacity Utilization |
|
|
|
| Productivity |
|
|
|
| Exports |
 |
|
|
| Goods Shipments |
|
|
|
Biweekly Notes
Eli Lilly and Company announced on October 23 that it has completed the first phase of a $560 million expansion to its state-of-the-art biotech complex in Indianapolis, Indiana, as part of a $1 billion investment in its biotechnology drug research and development capabilities. Lilly has been a leader in biopharmaceuticals since 1922, when the company began making and marketing insulin. Today Lilly is the fifth largest biotechnology company in the world as measured by total sales. Approximately 30 percent of its total drug portfolio is biotech medicines in several therapeutic categories, representing approximately $3.6 billion of the company's 2005 sales.
(Eli Lilly)
On November 3, Department of Labor reported that non-farm payroll employment increased by 92,000 following gains of 148,000 in September and 230,000 in August. While employment declined in manufacturing and construction, job gain continued in several service-providing industries. However, new jobs created in October, fell short of economists’ expectations for an increase of around 125,000 positions. Nonetheless, job gains in both August and September turned out to be much stronger than previously estimated. Also unemployment rate dropped to a five-year low of 4.4 percent, report said. (Bureau of Labor Statistics)
U.S. Manufacturing Key Stats
Manufacturing Wage Rates
Manufacturing Profits
For the second quarter of 2006, manufacturing profits fell 3.6 percent or $10.8 billion to $289.9 billion from $300.7 billion in the preceding period (first quarter). However, corporate profits for manufacturing have risen $210.1 billion or 263.3 percent since the second quarter of 2001. [Profits Data; Quarterly Change Data; Graph]
(BEA/DOC data released, September 28, 2006; next release is November 29 )
Manufacturing Employment
In October 2006, manufacturing employment decreased 39,000 to 14.2 millions from September. The decline was reported in both, durable and non-durable, sub-sectors. Within durable goods, factory job losses occurred in several industries including Wood Products (-5,000), Fabricated Metal Products (-3,700), Furniture and Related Products (-3,300), and Motor Vehicles and Parts (-14,700). For non-durable goods, job losses registered in Plastics and Rubber Products primarily due to strike (-13,800) in rubber products manufacturing, food manufacturing (-2,800), paper and paper products (-1,600), and textile mills (-1,700). Since June 2006, manufacturing employment has declined by 78,000. 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/DOL data released November 3, 2006; next release is December 8)
Manufacturing Production
In September 2006, the manufacturing output declined 0.3 percent from August, as 0.4 percent drop registered in the durable goods production and 0.2 percent decline in the output of non-durables. In the durable manufacturing category, the production of motor vehicles and parts fell 2.1 percent and was down 6.9 percent from its year ago level. By contrast, the output of computer and electronic products increased 1.1 percent and was up 18.4 percent from a year ago. Among the non-durable goods industries, the output of chemicals, plastics and rubber products, textile mills, apparel and leather, all decreased significantly. However, the output of petroleum and coal products increased sharply, and the production of food, beverage, and tobacco products advanced. Nevertheless, the output index moved up 6.3 percent from a year ago level. [Production Data; Monthly Change Data; Annual Change Data; Graph]
(Federal Reserve data released October 17, 2006; next release is November16)
Manufacturing Capacity Utilization
U.S. manufacturing industries operated at 80.6 percent of capacity in September 2006, a rate 1.1 percent higher than its 1972-2005 average of 79.5 percent. [Capacity Utilization Data; Graph]
(Federal Reserve data released October 17, 2006; next release is November16)
Manufacturing Productivity
Manufacturing productivity increased 5.9 percent in the third quarter of 2006, as output grew 4.2 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. Strong productivity growth has resulted in the decline in manufacturing employment.
[Productivity Data; Quarterly Change Data; Annual Change Data; Graph]
(BLS/DOL data released November 2, 2006; next release is December 5)
Manufacturing Trade
For the first seven months of 2006, U.S. manufactured goods exports accounted for 64.0 percent of all U.S. exports of goods and services. During that same period, manufactures exports were 13.7 percent above year ago levels, while imports were up 11.6 percent. The trade deficit in manufactures increased to $554.0 billion (annual rate) for 2006, up from $511.6 billion a year ago.
(Census Bureau/DOC data released, October 12, 2006; next release is November 9)
Manufactured Goods Shipment
Shipments of manufactured durable goods in September 2006, decreased $5.9 billion or 2.8 percent from August (revised) to $208.6 billion, down two of the last three months. However, this decline was followed by a 2.0 percent August increase. [MGS Data; Graph]
(Census Bureau/DOC data released October 26, 2006; next release is November 28)
Manufactured Goods Prices
The producer price index for finished goods, except foods and energy, rose 0.6 percent in September 2006, after decreasing 0.4 percent in August. However, the index increased 1.2 percent from a year ago. The finished energy goods index fell 8.4 percent in September after gaining 0.3 percent in August. The index for finished consumer goods except foods and energy increased 0.5 percent in September after falling 0.5 percent in August. [Price Index Data; Annual Change Data]
(BLS/DOL data released October 17, 2006; next release is November 14)
Institute for Supply Management’s (ISM) Index
- In October 2006, the Index of Manufacturing Production was 51.2 percent, 1.7 percentage points lower than the 52.9 percent reported in September. Index reading above 50 points indicates that the manufacturing economy is generally expanding; below 50 points indicates that it is generally contracting .
- One of the ISM index’s components, prices that manufacturers paid for goods, decreased sharply in October to 47 percent from 61 in September, with only 18 percent of U.S. supply executives noting some concern over high energy prices. A Prices Index above 47.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
U.S. Industries Reporting Growth in October 2006
Prepared by: Indumati Jasani
Office of Competition and Economic Analysis
International Trade Administration
U.S. Department of Commerce
(202) 482-3699
