First Quarter Real GDP Revised from 0.7% to 1.2% Growth

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Bureau of Economic Analysis reported that the U.S. economy grew 1.2 percent in the first quarter in newly revised figures. This improved slightly from the earlier estimate of 0.7 percent growth, but nonetheless, it continued to represent a slow start to the year. The upward revision stemmed mainly from improved data on consumer and business spending, even as the drag from inventory spending was somewhat larger.

To be fair, we traditionally have a sluggish first quarter followed by a strong rebound in the second quarter. My current forecast is for at least 3.0 percent growth in real GDP in the second quarter, with the economy expanding 2.2 percent for 2017 as a whole. Of course, these estimates might drift higher with passage of more pro-growth policies, especially in terms of the outlook later this year and into 2018.

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Infrastructure: But How Do We Pay For It?

By | Infrastructure, Shopfloor Main, Shopfloor Policy | No Comments

Written by Fluor Chairman and CEO/NAM Board of Directors Vice Chair David Seaton.

There is widespread consensus that America’s infrastructure needs help. It ranks 11th in the world, and the American Society of Civil Engineers has repeatedly graded it a D+.

As noted in the NAM’s Building to Win infrastructure plan, “Without immediate action on the infrastructure crisis, the United States will lose more than 2.5 million jobs by 2025 and more than 5.8 million by 2040.” We have a big job ahead of us; the estimated funding needs exceed $1 trillion. So how do we pay for it? Read More

Manufacturers are Only as Strong as American Infrastructure

By | Shopfloor Main, Shopfloor Policy, Transportation | No Comments

Blog written by Barry Pennypacker, President and CEO of The Manitowoc Company, Inc.

At Manitowoc’s crane manufacturing facility in Shady Gove, Pennsylvania, countless truckloads of material come in and out our facility every day. Interstate I-81 is a central outlet for those trucks, and any problem with that highway is a problem for our business, our customers and our workers.

And I-81 has problems. Read More

Manufacturing Production Rebounded Strongly in April

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Federal Reserve said that manufacturing production rebounded strongly in April after pulling back in March. Output in the sector rose by 1.0 percent, led by a significant recovery in motor vehicles and parts production, up 5.0 percent, among others. It was the sixth time in the past seven months that manufacturing production has increased. While the sector continues to have some lingering challenges, this report is yet another sign that the sector has turned a corner and is moving in the right direction. Indeed, manufacturing production has increased 1.7 percent over the past 12 months, its strongest year-over-year pace since January 2015. Similarly, manufacturing capacity utilization jumped from 75.2 percent to 75.9 percent, a level not seen since December 2014.

Digging into the underlying data, durable and nondurable goods output were both up by 1.0 percent in April, mirroring the manufacturing sector as a whole. Beyond automotive, the largest gains in the sector were seen in the following segments: petroleum and coal products (up 2.5 percent), electrical equipment and appliances (up 1.8 percent), miscellaneous durable goods (up 1.8 percent), food, beverage and tobacco products (up 1.6 percent), textile and product mills (up 1.4 percent), printing and support (up 1.0 percent), machinery (up 0.9 percent), plastics and rubber products (up 0.9 percent) and paper (up 0.8 percent). In contrast, there was reduced production for the month in the nonmetallic mineral products (down 1.0 percent), aerospace and miscellaneous transportation equipment (down 0.7 percent), primary metals (down 0.6 percent) and apparel and leather (down 0.1 percent) sectors.

Meanwhile, total industrial production also increased by 1.0 percent in April, its fastest monthly gain in just over three years. In addition to manufacturing, mining and utilities output were higher for the month, up 1.2 percent and 0.7 percent. Over the past 12 months, total industrial production has risen 2.2 percent. Much like the manufacturing data described above, that was the highest year-over-year rate since January 2015, and it was a definite improvement from the -1.7 percent year-over-year rate seen one year ago. Mining production has increased 7.3 percent year-over-year, but utilities output was off by 0.5 percent since April 2016. Capacity utilization rose from 76.1 percent to 76.7 percent, a 20-month high.

American Values, Manufacturing Have a Place in Cuba

By | Shopfloor Main, Trade | No Comments

Manufacturers in the United States produce great products desired across the globe each and every day. But our single greatest export remains America’s values – values which include free enterprise, competitiveness, individual liberty and equal opportunity, and a willingness to lead by example.

That has never been clearer to me than it was during my recent trip to Cuba when I took eight manufacturers there to engage in discussions with government officials and engage in a dialogue with the Cuban people.

Times have changed. The tense days of Kennedy, Castro, and the Cuban missile crisis are behind us. I witnessed a nation in transition, whose citizens want to adapt their economy and expand their opportunities.

The decision to normalize diplomatic relations with that isolated island was controversial in some quarters, but a recent national survey found that nearly three-quarters of U.S. adults favor ending the U.S. trade embargo against Cuba. They also favor lifting the restrictions on travel to the island. Based on what I saw during my visit, clearly the time is right for positive interactions between the United States and Cuba.

Cuba May 2017

Economic engagement will benefit both countries. But in the case of Cuba, it will launch its citizens on a trajectory of greater prosperity, opportunity, and freedom.

To get there, we need to do more.

Just 90 miles from the United States, Cuba is well-positioned to become a market for U.S. goods and services. With normalized trade, American exports of goods to Cuba could reach an estimated $4 billion per year.

While the United States has eased some of the restrictions on travel, trade and investment, lifting them completely is up to Congress.

The U.S. government has made allowances for some exports to Cuba and issued changes to facilitate authorized travel to the island. There remains, though, a long road ahead for both countries to expand trade and investment opportunities.

Manufacturers are committed to sharing with the Cuban people American values that will enrich the lives of all. Congress needs to listen, and to take action by repealing the trade embargo and lifting restrictions on travel once and for all.

The Cuban government should reciprocate by allowing U.S. companies to trade directly with the emerging Cuban private sector and by continuing market-oriented reforms that facilitate foreign investment.

I encourage you to communicate with your representatives in Washington. Expanded economic engagement means new opportunities for us, and greater prosperity and freedom for Cubans. It is time to demonstrate our American values in action.

Manufacturing Jobs Increase for Fifth Straight Month

By | Economy, Shopfloor Main, Shopfloor Policy | No Comments

Manufacturers added 6,000 workers in April, marking the fifth straight month of job gains in the sector. The U.S. unemployment rate dropped to 4.4 percent, the lowest since May 2007. Business leaders in the manufacturing sector are more upbeat in their economic outlook so far in 2017, with demand and production expanding modestly once again. As a result, hiring appears to be less cautious this year, especially relative to the loss of 16,000 workers on net seen last year. Small and medium-sized manufacturers have been essential to the turnaround in employment conditions – something that we are quite mindful of during Small Business Week. More than three-fourths of the job gains in the ADP report released earlier in the week emanated from small and medium-sized enterprises, and they account for the bulk of our membership at the NAM.

While we have seen manufacturing turn the corner economically globally, much of the increase in optimism of late stems from an expectation of more pro-growth policies emanating from Washington. Already, we have had positive engagements with the new Trump Administration, as noted in our recent thank-you campaign surrounding the first 100 days, especially when it comes to regulatory relief and a willingness to listen to the priorities of the business community.

Soft Real GDP Growth in the First Quarter

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Bureau of Economic Analysis reported that the U.S. economy grew 0.7 percent at the annual rate in the first quarter, starting 2017 off on a soft start as expected. This follows real GDP growth of 2.1 percent in the fourth quarter. Weaker consumer and inventory spending in the first quarter could explain the lower figures, with government spending also serving as a drag on the headline number.

To be fair, this is just the first estimate, so there is a chance that future revisions might show better growth, particularly if incoming data for March are better than expected. In addition, we traditionally have a sluggish first quarter followed by a strong rebound in the second quarter. My current forecast is for 2.8 percent growth in real GDP in the second quarter, with the economy expanding 2.1 percent for 2017 as a whole. Of course, these estimates might drift higher with passage of more pro-growth policies, especially in terms of the outlook later this year and into 2018.

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ShopTalk Podcast: President Trump’s 100 Days of Reg Reform

By | Shopfloor Main, Shopfloor Policy, ShopTalk | No Comments

As manufacturers look to our nation’s leaders to rethink red tape and reduce the cost of doing business in America, regulations continue to be cited as a top issue. It has been more than four decades since a president has addressed the regulatory burden in our country head-on, and now as we reflect on the first 100 days of this new administration, President Donald Trump has presented a new and innovative approach to reducing regulations that has already begun to have a positive effect for manufacturers nationwide.

In the latest installment of our ShopTalk podcast, NAM Senior Vice President of Communications Erin Streeter sits down with NAM Senior Vice President of Policy and Government Relations Aric Newhouse and NAM Vice President of Labor, Legal and Regulatory Policy Rosario Palmieri to discuss the current regulatory playing field and what manufacturers can expect in the future.

Good News: Bipartisan Regulatory Reform Introduced in Senate

By | General, Shopfloor Main, Shopfloor Policy | No Comments

In the first 100 days of the Trump administration, manufacturers have seen many actions from President Trump to provide regulatory relief. Now, there’s good news coming from the Senate as well. Senators Rob Portman (R-OH) and Heidi Heitkamp (D-ND) have released the Regulatory Accountability Act, which, in their words is “designed to make federal regulations smarter and more effective so they better support businesses, families, and jobs by modernizing the federal regulatory process that hasn’t been significantly reformed in 70 years.”  Read More

Small Texas-Based Boot Manufacturer Thinks Big

By | Shopfloor Main | No Comments

AUSTIN, Texas—In his 1,600-square-foot headquarters, which the National Association of Manufacturers (NAM) visited during its 2017 State of Manufacturing Tour, Joshua Bingaman is a whirling dervish—designing, packaging and shipping upscale boots to as many as 150 customers per month. A former singer, shoe store owner and coffee shop proprietor, Bingaman is the founder of HELM Boots, a small but fast-growing company.

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