Today, the Department of Labor and the Federal Acquisition Regulation Council announced the proposed regulations to implement President Obama’s “Fair Pay and Safe Workplaces Order.” The proposed regulations are the culmination of nearly a year’s work by the agencies in drafting what are perhaps the most politically motivated changes to the federal procurement process in decades. The last attempt to inject such partisan politics into procurement happened at the end of the Clinton Administration in 1999 and 2000. Those regulations were rolled back in 2001. Back then it was called “High-Road Contracting,” but the intent was the same. (continue reading…)
Last week, Rep. Steve Scalise (R-LA) and Sen. Shelley Moore Capito (R-WV) introduced H.R. 2557/S. 1425, the “Promoting New Manufacturing Act,” in the House and Senate. The NAM has been a longtime supporter of this bill, on which we testified and supported with a Key Vote Letter in the 113th Congress.
The Promoting New Manufacturing Act would make a series of relatively simple enhancements to the air permitting process to enable manufacturers to get their permits quicker while allowing the EPA to continue to protect the environment. It would create a permitting dashboard, requiring EPA to publish information on the regarding the estimated number of permits issued annually and timelines for making final permit decisions; it would require that if the EPA Administrator establishes or revises a national ambient air quality standard (NAAQS), the agency publish implementing regulations and guidance at the same time, including information regarding the submittal and consideration of preconstruction permit applications; and it would require EPA to report annually to Congress on actions being undertaken by the agency to expedite the processing of permit applications. (continue reading…)
The Dallas Federal Reserve Bank said that manufacturing activity contracted in Texas for the fifth straight month. The composite index of general business conditions declined from -16.0 in April to -20.8 in May, falling to its lowest level since June 2009. Manufacturers in the district continue to struggle with lower crude oil prices; although, there might also be a sense of stabilization. As one fabricated metal manufacturing respondent said in the sample comments, “With some recovery in the price per barrel of oil, the general feeling is that our business has leveled.”
Still, these data suggest that demand and production remain very weak right now. The underlying data were mostly lower across-the-board, with declines in activity getting larger, at least for now. This included measures for new orders (down from -14.0 to -14.1), production (down from -4.7 to -13.5), shipments (down from -5.6 to -13.2), capacity utilization (down from -10.4 to -11.6), employment (down from 1.8 to -8.2) and hours worked (down from -5.0 to -11.6). Illustrating this point, 31.0 percent of survey respondents cited declining new orders for the month, with just 16.9 percent noting increases. On the other hand, capital expenditures (up from 3.3 to 3.4) continued to expand somewhat modestly, providing some degree of optimism moving forward. (continue reading…)
The Richmond Federal Reserve Bank said that manufacturing activity expanded ever-so-slightly in May, an improvement after contracting in both March and April. The composite index of general business activity improved from -3 in April to 1 in May. The underlying data were also better, including new orders (up from -6 to 2) and capacity utilization (up from -4 to 7). Shipments (up from -6 to -1) continued to contract, but at a slower pace of decline for the month. At the same time, the labor market was mixed. The rate of employment growth (down from 7 to 3) eased somewhat, but the average workweek (up from 4 to 6) and wages (up from 9 to 20) were stronger. (continue reading…)
The Census Bureau said that new durable goods orders declined by 0.5 percent in April, pulling back from the 5.1 percent increase in March. Strong defense and nondefense aircraft orders in March helped to buoy that month’s figures, with April’s data reflecting a slight pullback from those levels. Aircraft sales are often bulked together in batches, making them more volatile from month-to-month. As a whole, transportation equipment orders fell 2.5 percent, largely on the decreases for aircraft. Motor vehicles and parts sales, which are also part of transportation orders, rose 0.3 percent in April, edging a bit higher after growing by 4.2 percent in March.
Excluding transportation, new durable goods orders were up 0.5 percent in April. It was the second straight monthly increase, building off of the 0.6 percent gain observed in March. That provides a degree of comfort, and yet, we have seen softness in this measure over much of the past year. New durable goods orders excluding transportation measured $157.7 billion in April, down 0.9 percent year-over-year from $159.1 billion in April 2014. Indeed, this broader measure has fallen from $164.3 billion in September, its peak of 2014. (continue reading…)
Here is the summary for this week’s Monday Economic Report:
The minutes of the April 28–29 Federal Open Market Committee (FOMC) meeting highlighted the nuance that many of us see in the economy right now. The Federal Reserve highlighted a number of challenges facing consumers and businesses in the early months of 2015, noting how these headwinds have dampened overall activity year-to-date. On the other hand, the FOMC felt that slowing economic growth was largely due to “transitory factors,” with its outlook mostly unchanged for the rest of this year. The Federal Reserve projects growth of 2.3 to 2.7 percent in 2015, and it expects the unemployment rate to fall to 5.0 to 5.2 percent. (continue reading…)
Today, the Senate voted to pass H.R. 2353, the Highway and Transportation Funding Act of 2015. The House passed the measure earlier this week in a 387-13 vote. The NAM sent Key Vote letters to the House and Senate this week in support of the short-term measure that will keep federal highway and transit projects around the nation funded until July 31.
H.R. 2353 is not the solution that manufacturers envisioned when the 114th Congress commenced in January 2015. This legislation is yet another temporary fix to a problem that has grown in size and scope over the years. Dealing with long-term transportation funding at a later date is not leadership.
With deteriorating roads and bridges, aging transit systems and growing maintenance backlogs across the states, Congress is telling manufacturers, businesses and the American people that transportation can wait.
Transportation can’t wait. Several small and large manufacturers took time away from their shop floors last week and came to Washington to keep making the case for transportation infrastructure before Members of Congress and at the White House.
NAM Member Scott Stevens, President of Dimension Fabricators in Schenectady, New York fabricates reinforced steel. He came to Washington last week from New York to articulate the importance of a well-funded, multi-year highway bill and explain the real-world impacts when states pull back infrastructure funding due to the long-term uncertainty of a federal transportation authorization. Scott was joined by NAM Member Stephen Roy, President of Mack Trucks in Greensboro, NC, a subsidiary of the Volvo Group. Scott Stevens has several Mack Trucks in his fleet and when he does well and grows, he buys more Mack Trucks. Scott and Stephen also met NAM Member Ron Dickerson, a Vice President and General Manager at Nucor Steel Indiana in Crawfordsville, IN. Dimension Fabricators and Mack are also Nucor customers. The customer and supplier relationship unfolded during meetings on the Hill and this what happens when manufacturers tell a powerful story.
While assurances have been made that the surface transportation authorization is critically important in this Congress, this week’s transportation vote was not a win for manufacturers. It’s simply another day to keep things moving and avoids the embarrassing spectacle of a shutdown.
For NAM Member Astec Industries whose President and CEO Ben Brock also traveled to Washington last week, the temporary move is yet another disappointment and represents the frustration manufacturers feel about Washington. Over the past few weeks, Astec has worked to mobilize its employees and the communities where it manufactures and it will continue efforts.
Manufacturers can’t wait. Congress must act.
The Bureau of Labor Statistics said that consumer prices rose 0.1 percent in April, slightly lower than the 0.2 percent gains observed in both February and March. Lower energy prices helped to reduce the pace of the headline number, with energy costs down 1.3 percent for the month. Gasoline prices declined 1.9 percent in April, easing a bit after 2.4 percent and 3.9 percent increases observed in February and March, respectively. On a year-over-year basis, gasoline sells for 31.7 percent less today than in April 2014. Note that the average price of gasoline has risen a little since then, with the Energy Information Administration reporting that the average price of regular gasoline was $2.604 per gallon on May 18, up from $2.315 on April 6. This is still more than one dollar lower than seen 12 months ago. (continue reading…)