The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded in February at its strongest rate since November 1983. The composite index of general business activity rose from 23.6 in January to 43.3 in February, with 48.2 percent of survey respondents suggesting that conditions had improved this month. Just 4.8 percent said that conditions had worsened. Other measures were also uplifting, including new orders (up from 26.0 to 38.0), shipments (up from 20.5 to 28.6) and the average employee workweek (up from 6.8 to 13.6). Growth in hiring (down from 12.8 to 11.1) continued to expand modestly despite some easing in the current release. Read More
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts declined 2.6 percent in January, pulling back a bit after rebounding by 11.3 percent in December. New residential construction activity dropped from an annualized 1,279,000 in December to 1,246,000 in January. Another positive sign was the fact that housing starts have now exceeded 1.2 million in three of the past four months – a psychological threshold that we have struggled to maintain each time. Despite the easing in this report, housing market data remains mostly encouraging, up 10.5 percent over the past 12 months from 1,128,000 in January 2016. Indeed, much of the recent volatility has come from the multifamily segment, ranging from 271,000 units in September to 471,000 in December. In this release, multifamily starts decreased to 423,000 units, up 19.8 percent year-over-year from 353,000 units one year ago.
On the other hand, single-family housing starts have more consistently drifted higher, even with a slight lull in both November and December. Single-family starts rose from 808,000 in December to 823,000 in January. While this was lower than the 868,000 units started in October, its fastest pace since October 2007, the current data represent progress from 775,000 units in January 2016, a year-over-year gain of 6.2 percent. Read More
The Census Bureau said that retail sales rose 0.4 percent in January, extending the 1.0 percent gain seen in December. It was the fifth consecutive monthly increase in retail spending, illustrating once again that Americans have been willing to open their pocketbooks after being more cautious with their purchases at this time last year. Indeed, over the past 12 months, retail sales have jumped 5.6 percent, a healthy rebound from a year-over-year pace of just 2.2 percent in August. Motor vehicles and parts sales have been a relative bright spot of late, but the January data were held back somewhat by a 1.4 percent decline in auto sales. To be fair, this drop was likely a response to a larger-than-normal jump in December in motor vehicle purchases, up 3.2 percent. Excluding automobiles, retail sales rose 0.8 percent in January, with year-over-year growth of 5.3 percent. Read More
The Federal Reserve said that manufacturing production expanded for the fourth consecutive month. (To be fair, November’s increase was essentially stagnant, up 0.03 percent.) Output in the sector was up 0.2 percent in January, extending the 0.2 percent gain seen in December. The recent improvements suggest that manufacturers are beginning to recover from notable weaknesses over the past two years, with a strong dollar and global headwinds dampening overall activity. In that regard, manufacturing production grew just 0.3 percent year-over-year in January, highlighting the significant challenges seen over the past 12 months in growing production. Similarly, manufacturing capacity utilization edged up from 75.0 percent to 75.1 percent, which, despite some progress, continued to be below the 75.5 percent utilization rate observed one year ago. Read More
The Bureau of Labor Statistics reported that manufacturing ran up the score for the second straight month in January began the new year on an encouraging note. The sector added 5,000 workers in January, building on a gain of 11,000 workers in December.
We hope this is a sign that manufacturers are starting to accelerate their hiring in light of a stronger demand and production outlook. Today’s report stands in contrast to the numbers throughout much of 2016. Last year, manufacturers were taking a more cautious approach, and as a result there are 46,000 fewer manufacturing workers today than one year ago, as global headwinds and economic uncertainties continued to take their toll on manufacturing activity. Read More
Republicans and Democrats unified today to advance an infrastructure agenda in the 115th Congress. House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) began the hearing “Building a 21st Century Infrastructure for America” by referencing a letter to President Donald Trump from nearly 400 manufacturing, labor, business, construction and policy groups urging for a broad infrastructure bill that addresses all types of infrastructure and includes a solution to make the Highway Trust Fund solvent. The National Association of Manufacturers (NAM) worked with a broad business coalition to secure support for the effort from national organizations as well as local and state groups from every state in the country.
Committee members heard a united message about the immediate need to upgrade transportation and infrastructure systems to ensure U.S. global competitiveness. Testimony came from AFL-CIO President Richard Trumka and four NAM members:
- Frederick Smith, chairman and CEO of FedEx Corporation
- David MacLennan, chairman and CEO of Cargill, Incorporated
- Ludwig Willisch, president and CEO of BMW of North America
- Mary Andringa, chair of the board of Vermeer Corporation
Andringa shared Vermeer’s Lean journey and the steps taken to reduce waste and increase efficiency in the manufacturing process.
“If ports are clogged, trucks are delayed, power is down or the internet has a lapse, productivity and customer service are impacted,” said Andringa. “This is not just my story. Across the manufacturing sector, transportation logistics matter, and congestion—whether at a port or on a crowded highway—is waste that drives the consumer’s cost up like a hidden tax.”
The NAM will continue to educate new members of the 115th Congress about the central role infrastructure plays on the shop floor and will continue to lead advocacy efforts supporting a 21st-century infrastructure system. In “Building to Win,” the NAM described the immediate need to update our roads, bridges, transit systems, ports, inland waterways, broadband and telecommunications networks, airports and runways, pipelines, energy infrastructure, drinking water and wastewater systems and railways. The blueprint includes solutions, such as possible funding and financing mechanisms, as well as good governance policy reforms, such as streamlining permitting.
While manufacturers were encouraged by President Trump’s campaign promise to rebuild American infrastructure and make it “second to none,” accomplishing this will require continued advocacy and education efforts to gather the bipartisan support to encourage a significant change from the status quo.
The Institute for Supply Management’s (ISM) Manufacturing PMI continued to grow rather strongly, accelerating to its fastest pace since November 2014. The composite index rose from 54.5 in December to 56.0 in January, and it marked the fifth straight monthly expansion in the headline number. New orders (up from 60.3 to 60.4) and production (up from 59.4 to 61.4) expanded strongly in January. Along those lines, the sample comments all point to healthier conditions and stronger demand in the manufacturing sector, which is very encouraging. In addition, employment also picked up the pace (up from 52.8 to 56.1), suggesting that manufacturers have begun to move past the more cautious approach to hiring seen just a few months ago. Read More
Today more than 400 businesses and business organizations sent a letter to the U.S. Senate urging support for the confirmation of Wilbur Ross as secretary of commerce. Spearheaded by the National Association of Manufacturers (NAM), the letter urges swift action on Mr. Ross’ confirmation.
“We believe that Wilbur Ross will bring a unique understanding of what it takes to fuel manufacturing enterprises to this vital role,” the letter reads. “Mr. Ross has a firsthand understanding of the challenges manufacturers face to remain globally competitive in today’s economy.”
Read the full letter here.
NAM President and CEO Jay Timmons also sent a letter yesterday on behalf of the NAM offering his support for Ross’ confirmation.
“Wilbur is a businessman with extensive experience in a wide range of industries who knows firsthand what policies it takes to promote competitiveness, investment, job creation and durable economic growth,” Timmons wrote. “In particular, Wilbur has extensive experience in the manufacturing sector and understands the critical need for pro-growth trade, tax and other economic policies.”
Timmons’ letter is available in its entirety here.
The Bureau of Economic Analysis said that the U.S. economy grew 1.9 percent at the annual rate in the fourth quarter in preliminary data. This was slightly less than the consensus estimate for 2.2 percent, and it was slower than the 3.5 percent increase seen in the third quarter. Real GDP growth was buoyed by modest growth in consumer and government spending and by a continuing rebound in business investment, but net exports served as a drag on the headline number. Overall, the U.S. economy expanded 1.6 percent in 2016, down from its 2.2 percent post-recessionary average, and the year was mostly marked by an all-too-cautious approach to spending on the part of consumers and business leaders. Yet, by year’s end, that began to change – with many Americans and firms more willing to open their pocketbooks. Moving forward, I would expect 2.6 percent growth in real GDP in 2017 – a figure that can be assisted by pro-growth policies emanating from Washington including comprehensive tax reform, regulatory balance and investment in infrastructure.
Looking more closely at the underlying data, consumer spending on goods increased 5.2 percent at the annual rate in the fourth quarter, building on the 3.5 percent gain seen in the third quarter. This figure was boosted by strength in durable goods purchases including motor vehicles. Personal consumption expenditures added 1.70 percentage points to real GDP in the fourth quarter, with 0.58 percent coming from services and 1.11 percent stemming from goods spending.
Healthier business spending also served to boost real GDP growth, with gross private domestic investment adding 1.67 percentage points to the top line. It was the largest contribution to the real GDP since the second quarter of 2014. Residential and nonresidential fixed investment rose 10.2 percent and 2.4 percent in the fourth quarter, respectively, with both notching notable improvements from the third quarter. Indeed, residential spending rebounded from a sharp decline in the prior report, and equipment spending rose for the first time in five quarters. Inventories were also up significantly for the second straight quarter, accounting for a full percentage point of the 1.67 percent contribution in this category. Yet, it was not all good news, as nonresidential fixed investment in structures fell 5.0 percent in the fourth quarter.
Finally, manufacturers have been challenged over much of the past two years by a number of global headwinds. This has included a rapid appreciation in the U.S. dollar, as well as economic softness to many key markets. Along those lines, the contribution to GDP from net exports slipped back into negative territory in the fourth quarter for the first time in 2016, subtracting 1.70 percentage points to the headline number. (Put another way, if it had not been for net exports, real GDP growth in the fourth quarter would have been 3.6 percent, not 1.9 percent.) Goods imports jumped 10.9 percent in this release, with goods exports off by 6.9 percent.
This guest blog post is authored by Rebecca Lucore, head of CSR and sustainability, Covestro LLC.
At Covestro, we think of ourselves as the “new-old company.”
Formerly Bayer MaterialScience, Covestro was “reborn” in the fall of 2015 as its own, independent entity. Being independent means we can chart our own course—one that’s fully embedding sustainability into the heart of our business strategy.
As an innovative producer of advanced materials, it’s true our products enable other industries to make more energy-efficient products. In fact, this past summer, our ultra-lightweight coatings, polycarbonate and polyurethanes propelled the groundbreaking Solar Impulse—the world’s first 100 percent solar-powered aircraft—to complete its historic flight around the world without using a single drop of fossil fuel.
Solar Impulse was a virtual flying laboratory for clean technologies and material innovations. The cockpit featured our adhesives and coatings, as well as our polyurethane foam, which provided the insulation that kept the pilot safe and comfortable in wide-ranging temperatures. This highly efficient insulating foam, which saves 70 times more energy than is used to make it, is now being used in modern refrigerators. The plane’s polycarbonate windshield was another real energy saver, which is why the auto industry uses it in cars and trucks, understanding that the lighter the weight, the more fuel efficient the vehicle.
We know the manufacturing process behind these materials requires a lot of energy, so we’re continuously developing processes and solutions that reduce our energy use and carbon dioxide (CO2) emissions. Going forward, four-fifths of our research and development will be dedicated to delivering sustainable solutions through our products and processes, and these projects will be tied directly to the 17 Sustainable Development Goals established by the United Nations Global Compact, which we’ve signed on to.
But this isn’t just about the future. We’ve already made real progress. Read More