Manufacturing Biweekly Update
November 17, 2006 (Past Updates)
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Biweekly Notes
Merck’s Commitment to Competitiveness
On November 14, 2006, the U.S. Council on Competitiveness sponsored an Industry competitiveness forum in the Ronald Reagan Building in Washington, D.C. Among the participants was Merck & Company. Merck reports that to meet its competitiveness challenge, it has launched a program to support development of life-sciences in Brazil and Mexico, innovating new products that would improve its business environment, attract investment, and stimulate entrepreneurship for the economic betterment in these two countries. Under the “Clusters of Innovation” program, Merck is fulfilling an international economic responsibility to make both of these countries competitive in developing their human capital input into Merck’s (Merck, Sharpe, & Dohme-MSD) medical products for global markets.
(Source: The Innovative Imperative for Latin America: Brazil & Mexico; For Brazil: Joao Sanchez, Corporate Communications Director e-mail: joao_sanchez@merck.com and For Mexico: Deborah Lazard, Director of Innovation, e-mail: Deborah_lazard@merck.com. Material obtained at Innovations Conference, Reagan Bldg. Washington, D.C. 11/14/06).
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 industries such as 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 a strike in rubber products manufacturing (-13,800) , and 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 October 2006, manufacturing output declined 0.3 percent from September, reflecting a 0.2 percent drop in durable and 0.4 percent decline in non-durable manufacturing. In durable manufactures, motor vehicles and parts fell 3.9 percent with a decline of 10.4 percent from its year ago level. Conversely, computer and electronic products increased 1.6 percent in this current month and 19.5 percent over a year ago. Also, on the rise in production were aerospace and miscellaneous transportation and equipment industries. Among non-durable goods, industries that had small increases were apparel & leather, and printing & support production, while petroleum and coal products output declined. Despite the fall in production from September level, the manufactures output index was up 4.4 percent from a year ago. [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 80.4 percent of capacity in October 2006, a rate 0.9 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 nine months of 2006, U.S. manufactured goods exports accounted for 64.1 percent of all U.S. exports of goods and services. During that same period, manufactures exports were 14.3 percent above year ago levels, while imports were up 11.1 percent. The trade deficit in manufactures increased to $555.2 billion (annual rate) for 2006, up from $522.0 billion a year ago
(Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB06-164, BEA06-50, FT 900,” released November 9, 2006; next release is December 12) Current Foreign Trade Press Release; Historical Foreign Trade Press Releases
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 from “Advance Report on Durable Goods Manufacturers’ Shipments, CB06-161” released October 26, 2006; next release is November 28) Archived Durable Goods Press Releases
Manufactured Goods Prices
The producer price index for finished goods, except foods and energy, declined 0.9 percent in October 2006, after rising 0.6 percent in September. The finished energy goods price index fell 5.0 percent in October, after declining 8.4 percent in September. The index for finished consumer goods except foods and energy had dropped 0.8 percent in October after increasing 0.7 percent in previous month.
[Price Index Data; Annual Change Data]
(BLS/DOL data released November 14, 2006; next release is December 19)
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
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