Last Friday, the Commerce Department reported that new orders for durable manufactured goods increased by 3.1 percent in December. Following a 2.2 percent rise in November, it appears that the manufacturing expansion is on the rebound. In the fourth quarter of last year manufacturing output declined at an annual rate of 1.7 percent — the first decline since the second quarter of 2003

The rise in orders in December was led by a robust increase in aircraft orders– which accounted for more than half of the overall monthly increase. This should bode weuioll for exports in 2007, since roughly half of aircaft sales are destined for markets abroad. In addition, there were healthy gains in new orders of computer equipment as well as machinery and fabricated metals.

All told, it looks like business investment spending will continue to be a source of growth in the economy in the new year. However, the pace of growth will likely be slower than the increases that have taken place over the last couple of years. One of the reasons why business investment spending will likely be slower this year is that new emission standards for heavy duty trucks in 2007 have caused businesses to invest significantly in trucks before the new standard goes into effect. Over the past several years, purchases in new trucks have increased at very high rates (25 percent in 2004 and 2005). As a result, investment spending will likely grow at a milder 6 perent this year…compared to 8-9 percent growth over the past several years.

On the positive side, real wages grew at a solid 1.7 percent in 2006– the fastest pace in six years. This signals that even though the downturn in housing has limited the equity-induced growth in consumer spending, solid gains in real wages should bouy consumer spending in the new year.

Today’s luncheon speaker was former Florida Governor Jeb Bush. His speech is covered well by our friend Paul Mirengoff over at PowerLine and by Kathryn Jean Lopez at the National Review’s “Corner“. Calling himself “a proud conservative,” he laid out three “bedrock fundamental principles” for the assembled multitude: Belief in limited government, a commitment to reform and the realization that self-government requires a level of personal responsibility.

On limited government, he said it was “hard work,” cautioning against a government that grows faster than people’s ability to pay for it. When that happens, he warned, the resulting cost puts a greater burden on all individuals. He proudly pointed to his record on spending, saying that he had vetoed some 2500 special projects — from both parties — totaling some $2.3 billion. In fact, he exercised his line-time veto power so much he quipped that he earned the nickname “Veto Corleone.”

Education is a passion of his and he spoke of the great need for reform, saying it was “essential for our success” as a country, As we’ve said time and time again, he stressed that we need a “knowledge-based workforce”. He has been bullish about the manufacturing base in Florida (with the help of some NAM stalwarts like Al Stimac), so he knows what he’s talking about. On education, he said, “Success is never final, reform is continuous.”

He also talked about health care, highlighting a Medicare pilot project in just two Florida counties. However, their combined population would make them the 25th largest state. It is a plan that stresses wellness and cost containment and has met with success thus far.

He got a question on immigration, and it was clear that this is another issue near and dear to his heart. He mentioned that half the residents of Miami-Dade Country were born in another country. On this topic, he had some great lines: “The people who come to pursue their dreams unleash a contagious spirit,” he said, calling immigration, “A miraculous process that has made my country better.”

As he finished, strains of “Run, Jeb, Run!” could be heard about the room. He had already made clear he wasn’t running, and stressed the need for “a return to civility” in the Nation’s political discourse. Suffice it to say his speech was well-received.

The good folks over at the National Review were kind enough to invite us — as bloggers — to attend their summit this weekend, so the blogger-in-chief attended part of today’s session and Carter Wood is there for the duration, will add his two cents later.

Today opened with former House Speaker Newt Gingrich opining on just about everything. Newt is a controversial guy but he is very bright and is an engaging speaker, termed “a one-man think tank” by National Review Editor Rich Lowry. Newt was talking about the growing duration of the Presidential campaign season, with candidates announcing now almost two years before the election. By comparison, he noted that JFK announced on January 2 of 1960, while Ronald Reagan announced on November 13 of 1979, just short of a year before Election Day. Of course, he sees this all as consultant driven. It was clear that he had a minimum of high regard for consultants.

One is never in doubt about where Newt stands on just about anything. He talked about his new book, “The Art of Transformation” and its principles. Quoting Margaret Thatcher, he said, “First you win the argument, then you win the vote.” He is clearly a guy of ideas — some might say a machine — and all were on display at the summit.

A panel on Foreign Policy brought some information relevant to manufacturers from National Review editor-at-large and former Thatcher aide John O’Sullivan who lamented the rise of the “Trans-National Progressives” ( or “Transies” in his parlance). He was talking about the rise of international groups and non-governmental organizations rushing to set international standards that leave the US out in the cold. He pointed to groups pushing for reg-setting by the EU and to Kyoto as two examples. These are groups, he said, “with a hazy democratic accountability” but that are setting global policy in ways that may be damaging to US interests. On the issue of global economic growth, he noted that in 25 years, the US, India and China are projected to each have 25% of the world GDP, while the EU will have fallen to about 10%.

On an earlier panel on “Small Government,” Marvin Olasky said, “The best way to fight poverty is to grow the economy.’ We agree. Lots of free market folks in the room today.

As we’ve done every Saturday for almost two years now, we wake up, grab of glass of OJ and sit down to write the weekly installment of “Cool Stuff Being Made.” So this week, as we were looking what was in our inventory of videos we thought: ‘hey, why not show how the mattress that we just spent eight-or-so hours sleeping on is made?’ So there you have it. This week, we visit Lemoyne, PA to see how a Lemoyne Sleeper Mattress is made. While much of making a mattress involves a lot of fabric sewing, as you watch this video, you’ll be amazed to see how much of it isn’t done by hand anymore. Much of it is automated and requires skilled professionals to operate machines that communicate with other machines along the assembly line. In this 46 minute video, we follow company President Jerry Pearlman around as he provides an in depth tour of that various manufacturing steps and processes that are used to make over 30 different types of mattresses his company offers. You’ll see:

Quilting and sewing of the covers and panels
Adding of the mattress border
Flanging, bobbing and threading
Sewing of box spring covers and borders
Adding mattress handles
Loosening the springs and adding the right number according to the customers specifications

If some of these processes sound foreign to you, then you’ll just have to click here to feel the mattress manufacturing vibe! Oh, and while you’re at it, go ahead and jump on your mattress just one more time, we won’t tell Mom!

Imagine walking into the voting booth to cast your ballot. All of a sudden, from over your shoulder comes a voice, saying, “So you’re voting, huh? Better vote our way. Or else.”

Intimidating? You bet. An invasion of your privacy? You bet. But that’s just the kind of elections some labor unions want to impose on America’s workers.

Under current law, if a union wants to organize a business, they are required to get a certain percentage of employees to sign cards calling for a private, union election. That election then features secrets ballots, preserving the privacy of the employee’s vote.

But now, unions like the AFL-CIO are pushing Congress to approve what’s called a “card check” system.

Organizers simply collect a simple majority of employee signatures. A simple majority, that’s all that it takes, and bingo! You’ve got a union shop. No election. No secret ballot… But lots of potential for intimidation and coercion along that path.

America’s great tradition of the secret ballot is designed to protect an individual’s freedom of choice, to allow people to vote their conscience.

The “card check” legislation being considered by Congress would destroy those protections for America’s workers.

Our country defends free elections all around the world. This is no time to abandon them at home.

Today’s blog brings you the opportunity to hear an interview about how NAM and the Manufacturing Institute are helping to shape a stronger and larger workforce for manufacturing now and in the the immediate future, with implications for productivity, investment and innovation.

Better Process.com interviewed Phyllis Eisen, Vice President of the Institute and Executive Director of the Center for Workforce Success. Phyllis and her team are the inspiration and brains behind Dream It. Do It., the NAM/Institute initiative that is successfully drawing more smart young people into industry for a career.

You will definitely want to listen to this broadcast if you have any interest in the future of manufacturing. Phyllis points out that smaller manufacturers–a key part of the overall manufacturing supply chain–have challenges filling jobs for skilled workers, jobs are going unfilled and companies are being retarded in their growth.

In response to that, Dream It. Do It. was born about two years ago with a pilot in Kansas City. Since then, six other regional sites are taking root, most recently in Nebraska and the 16 county area of northeast Ohio (including Cleveland). Soon to launch are North Texas and Indiana. Our experience has shown that it definitely takes a region to make these efforts succeed. That’s not only because labor markets are regional, but also because the stakeholders include local business leaders, elected officials, school leaders and economic development officials. And their interests cut across city and county lines. Communities that get all of these diverse interests focused on manufacturing and headed in the same direction are a powerful voice.

In Kansas City, we saw that after a year of Dream It. Do It., applications to the local technical college leaped by 35 percent and the local leadership attributed it to this coalition of interests. DIDI, as it is called in short, has eye-catching ads that speak to young people (ages 16-26) and an alliance that is dedicated to increasing math and science skills and training for young people whose interest in manufacturing has been sparked. Linked with a community-wide economic development focus that understands that a skilled workforce is a major attraction for any region in this decade, and there is a winning combination for growing manufacturing.

To hear the full interview, click here. Kudos to Ken at Better Process.com for making these manufacturing interviews possible.

This week’s “America’s Business” radio program features NAM Board Member Kirk Liddell taking to the “The Soapbox,” calling for solutions to the asbestos litigation crisis still crippling many U.S. manufacturers. (Kirk is the head of the NAM’s board-level Legal Issue Policy Group.)

As CEO and Chairman of Irex Corp. in Lancaster, Pa., Kirk is a vocal advocate for manufacturing and the Keystone State. Well-respected by his peers, he was elected chairman of the Pennsylvania Chamber of Business and Industry.

In light of his new position, the latest Central Penn Business Journal publishes an interview with Kirk. He focuses on health care but touches on trade issues, as well, timely comments given President Bush’s anticipated request for renewed fast-track authority.

CPBJ: Does the chamber have a position on free-trade deals that come with conditions, such as protecting U.S. jobs or embracing certain environmental standards?

Liddell: Not the state chamber. The state chamber would take the position that the states should not be setting international trade policy. I happen to be on the National Association of Manufacturers’ executive committee, and I can tell you that it’s a huge issue there. Both the U.S. chamber and the National Association of Manufacturers are strongly free trade.

The fair-trade argument (is) “I’m for free trade, but it’s got to have all these strings.” My own personal view is that most of those strings actually end up hurting the people we think we’re helping. I think we should care about people and try to help the poor of the world. (The) best thing we can do for the poor of the world is free trade.

Good comments, good interview, and congratulations on your new leadership role at the Chamber!

On this week’s “America’s Business,” OMB Director Rob Portman joins host Mike Hambrick to review the President’s State of the Union address with an eye toward manufacturing-related issues. The State of the Union is also the subject of a journalists’ roundtable with reporters Richard S. Dunham, White House correspondent for BusinessWeek, and Mary O’Driscoll of Greenwire/Energy and Environment Week.

Bjorn Lomborg, noted author of “The Skeptical Environmentalist,” discusses the scientific and public policy disputes related to climate change, a topic Mike also tackles in an interview with Sen. James Inhofe, R-OK. The ranking member of the Senate Energy and Public Works Committee, Inhofe is a sharp critic of what he calls “global warming alarmism.”

Assessing recent House passage of legislation to increase royalties and taxes on the oil industry are Mark Kibbe, senior tax-policy analyst for the American Petroleum Institute, and Rep. Marsha Blackburn, R-Tenn., a member of the House Energy and Commerce Committee.

In our regular features, Phil Mullin of Garner Industries reports from “The Factory Floor” in Lincoln, Neb.; mounting “The Soapbox” to talk about asbestos issues is Kirk Liddell, president & CEO of Irex Corp. in Lancaster, Penn.; and the NAM’s Hank Cox recalls “The Way it Was.”

President John Engler closes with “The Last Word,” commenting on the workplace intimidation that will result from passage of union-backed “card check” legislation.

For more on “America’s Business” and to listen to this week’s program on-line, please click here.

Interesting piece on energy from (usually) wise man Charles Krauthammer in today’s WaPo that gets it two-thirds right on energy. He makes the case for tapping our own resources in ANWR and the Outer Continental Shelf and also makes the case for nuclear, two areas in which we would absolutely agree. However, he also includes as the third leg of the stool a higher gas tax, in order to lessen consumption.

Let’s put aside for the moment that a higher gas tax hits the poor and those on a fixed income disproportionately. Think of the impact on manufacturing and on all things that are transported, which is just about everything. Reference Red Cavaney’s point, noted yesterday here, that 92% of everything we buy has petroleum in its lineage. All those prices would rise if you boost the gas tax.

American manufacturers are already struggling mightily to compete in a pretty daunting global market while we have the highest legal costs, pay the highest prices for natural gas, have among the highest corporate tax rate, etc., etc. Let’s not add to this more expensive gasoline. A nice theory, maybe, but in practice would be deadly to America’s manufacturers and ultimately, consumers.

The annual Bureau of Labor Statistics (BLS)report on union membership is out, and it’s just more bad news for John Sweeney & Co. In the Fifties, unions represented almost 35% of the workforce. By 1983, that number had dipped to 20%. Yesterday’s numbers show that union membership has dropped to its lowest point since the government began tracking the numbers — to an embarrassing 12%. In the private sector, the news is even worse for labor, where they now represent a paltry 7.4% of all workers. Why? They continue to emphasize politics over organizing and at the end of the day, are selling a product most folks just don’t want to buy.

You’d think numbers like these would cause a little soul searching, but no such luck. Instead, they continue to work to find ways to lower the bar, to boost membership through artificial and anti-democratic means like the card check bill. Remember, this is the bill that’ll allow them to bypass elections to get new members. It’s a sign of their desperation that they’re willing to throw fundamental democratic principles out the window just to pad their numbers. What about doing it the old-fashioned way, by spending money on organizing and having fair elections? Nah, too hard.

So let labor congratulate itself on winning back the Congress for the Democrats — a feat owing more to the missteps of their foes than to their own actions. No matter. At the end of the day, their misguided focus on politics gives them a temporary political victory, one that comes at the great permanent cost of an ever-dwindling membership.

Click here to see the full BLS report.