Leadership Engagement Series Unites Manufacturers in Wisconsin

Manufacturers large and small gathered in Milwaukee today to discuss top manufacturing priorities and how to advance federal policies that boost U.S. manufacturers’ competitiveness. The event is part of NAM’s Leadership Engagement Series, a national roadshow stopping in multiple cities to encourage manufacturers to get engaged in the political process. Today’s panelists included manufacturing CEOs from Rockwell Automation, Neenah Enterprises, and Snap-on Incorporated.

Manufacturing leaders discussed the importance of manufacturing in Wisconsin, as it is the largest sector in the state’s economy and the number one job creator—accounting for 455,579 jobs last year. Unfortunately, the thriving industry is under attack by the federal government and its advancement of multiple policies that threaten the manufacturing comeback.  From rising healthcare costs and taxes to environmental overregulation, Congress isn’t doing the manufacturing industry any favors.

Manufacturers must make their voice heard in Washington. We need federal policies that enhance manufacturers’ ability to compete in the marketplace and give us the opportunity to grow and create more jobs.

Follow NAM on Twitter (@ShopFloorNAM) for more information on NAM’s Leadership Engagement Series and visit the NAM’s Election Center for more information on how you can get involved and make a difference.

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Corning Hosts Secretary Moniz to Celebrate Manufacturing Day

Manufacturing Day was a massive success and a testament to manufacturers’ commitment to their communities and their craft. President Obama recognized it with an official proclamation, declaring October 3rd as National Manufacturing Day and his cabinet helped recognize that at events around the country.

Corning put on an outstanding showcase of high-tech manufacturing, hosting Energy Secretary Dr. Ernest Moniz at their Erwin, New York Diesel plant to highlight its $250 million expansion and impressive growth of emission-control products, due in part to a pro-investment tax credit through the Department of Energy.

Dr. Moniz toured the plant, getting an up close look at the impressive array of clean-air products, an area where Corning has led in developing these technologies since the early 1970’s. Innovation and investment are drivers of a strong economy and Corning stands as a prime example where impressive growth and job creation are the end result.

“It’s especially fitting that we’re holding this event on National Manufacturing Day, because both the Department of Energy and the United Steelworkers were instrumental in enabling the $250 million expansion of [the Diesel plant],” said Wendell Weeks, Corning’s chairman and CEO. “It’s a terrific example of how government, business, and unions can work together to enhance our quality of life and strengthen our economy.”

The NAM tips its cap to Corning for shining a light on its proud tradition of innovation and growth.

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Monday Economic Report – October 6, 2014

Here are the files for this week’s Monday Economic Report: 

Several recent indicators have shown marked improvements in the U.S. economy and for manufacturing activity, particularly when compared to earlier in the year. These range from the NAM/IndustryWeek Survey of Manufacturers to increased levels of demand and output. Last week, for instance, the Institute for Supply Management (ISM) reported that the pace of production (up from 64.5 to 64.6) was marginally higher in September, with the index exceeding 60—indicating strong growth—for four consecutive months. Likewise, the new orders index has measured 60 or higher for three straight months, even though it eased somewhat in September (down from 66.7 to 60.0). That was an encouraging sign, and it was consistent with a relatively upbeat outlook as noted by the National Association for Business Economics (NABE).

Yet, the headline ISM Purchasing Managers’ Index (PMI) for manufacturing unexpectedly dropped from 59.0 to 56.6. The prior month’s reading had been a three-year high, making the deceleration in sentiment a bit of a disappointment. The drop stemmed from slower paces of growth for domestic sales, exports (down from 55.0 to 53.5) and employment (down from 58.1 to 54.6). Along those lines, manufacturers added just 4,000 net new workers in September, with August’s employment number revised lower to reflect a decline of 4,000 employees for the sector. As such, we have had two straight months of disappointing manufacturing jobs numbers, which stand in stark contrast to the stronger hiring rates seen prior to August. We can hope for healthier job gains in the coming months, which would be more consistent with the mostly optimistic tone seen in other measures.

Indeed, the Dallas Federal Reserve Bank’s manufacturing survey noted robust pickups in production, capacity utilization and shipments in September, and respondents continue to expect stronger activity levels over the next six months. In addition, factory shipments have risen 2.1 percent year-to-date through August, or 3.1 percent over the past 12 months. The corresponding data on new factory orders reflected a sharp decline in August, but that was the result of very strong nondefense aircraft sales in July. While new manufactured goods sales remained soft when excluding transportation orders, the underlying data also reflect gains made since the winter months. Moreover, manufacturers have been confident enough in their outlook to increase construction spending, which rose 1.5 percent in August, increasing for the fifth straight month. Year-over-year growth in manufacturing construction spending was an impressive 14.9 percent.

At the consumer level, personal spending rebounded in August after holding steading in July. Since winter-related declines in January, personal spending has risen 2.7 percent, with 4.1 percent growth year-over-year. Strength in durable goods purchases boosted the August consumption figure. Still, Americans remain anxious, particularly about labor and income growth. The Conference Board’s Consumer Confidence Index declined from 93.4 in August to 86.0 in September, a notable and sizable decrease especially after the index had been at its highest point since October 2007 in August. It is possible that geopolitical events have put the public on edge, dampening enthusiasm. (The same could probably be said of the ISM report discussed above.) We have similar concerns in comparable data from the University of Michigan and Thomson Reuters, and the two releases support the notion that the consumer remains cautious despite recent improvements in sentiment.

Meanwhile, the U.S. trade deficit narrowed from $40.32 billion in July to $40.11 billion in August, its lowest level since January. In general, we have seen the trade deficit decline after peaking at $45.98 billion in April. Since then, goods exports have increased by $3.79 billion, and goods imports have declined by $1.99 billion, helping to explain the bulk of the shift over that four-month period. Much of that improvement can be explained by increased energy exports and reduced energy imports.

After a busy economic data release calendar last week, this week will be much lighter. The minutes of the September 16–17 Federal Open Market Committee meeting will be released on Wednesday, with market watchers looking for clues for when the Federal Reserve will start raising short-term rates. Other highlights include the latest data on consumer credit, job openings and wholesale trade.

Chad Moutray is the chief economist, National Association of Manufacturers. 

manufacturing construction - oct2014

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SBA Speaks Out!

We congratulate the Small Business Administration’s Office of Advocacy for being “the voice of small business in government” today.  The SBA spoke loud and clear on how the proposed rule on “waters of the United States” will impact small business. The Office of Advocacy released a nine page letter this week calling for the EPA/Corps to “to withdraw the rule and conduct a SBAR (Small Business Advocacy Review) panel prior to promulgating any further rule on this issue.”

The SBAR panel that is required under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) and is designed to provide small business with direct input from affected businesses prior to rule being published.

The letter takes the agencies to task for improperly certifying the rule on three points: 1) the agencies used the wrong baseline for their Regulatory Flexibility Act certification; 2) the rule imposes direct costs on small businesses; 3) the rule will have a significant economic impact on small business.

The NAM membership is made up of predominantly small and medium size businesses. This rule will significantly impact not only manufacturers but farmers, developers, construction companies and a significant portion of the supply chain.

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Pfizer Puts Biotechnology on Display for North Carolina Students

Pfizer Global Supply in Sanford, North Carolina is helping celebrate Manufacturing Day by opening their doors for an educational event for local students, community leaders and Pfizer industry partners.  It’s a wonderful opportunity to spotlight the lifesaving and life changing vaccines and biotechnologies.

The student group will tour the site first and then join a panel discussion focusing on careers in vaccine manufacturing.  The second track will begin with a vaccine manufacturing panel discussion featuring NC State Representative Mike Stone, Pfizer’s Vice President of Biotech Operations, Matt Walker, and Sanford colleagues Charles Mitchell and Brian Franklin.  Following the panel discussion, this group will tour the facility.  The tours will focus on how vaccines are made, quality and engineering.

Today’s experiences are critical to encouraging students to pursue a career in biotechnology manufacturing and take part in the next generation of innovation.

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Manufacturing Job Growth Disappointed in September for the Second Straight Month

The Bureau of Labor Statistics said that manufacturers added 4,000 net new workers in September. As such, manufacturing job growth has disappointed for the second straight month, with August’s figure revised from being unchanged to being down by 4,000 employees. Prior to August, the sector had averaged 14,429 additional hires per month on net, and there was (and still is) an anticipation for that pace to continue moving forward.

Instead, job growth in the manufacturing sector was soft in August. Durable goods firms added 7,000 new employees, with nondurable goods businesses losing 3,000 workers. There was increased employment observed in the motor vehicles and parts (up 3,300), fabricated metal products (up 2,000), furniture and related products (up 1,400) and primary metals (up 1,100). Yet, these were partially offset by reduced hiring for electrical equipment and appliances (down 1,100), chemicals (down 900), computers and electronic products (down 400) and petroleum and coal products (down 400), among others.

Average weekly earnings were slightly lower, down from $1,018.41 in July to $1,015.14 in August, essentially returning to July’s numbers. This still reflects improved movement long term. In addition, the average number of hours manufacturers worked per week remained unchanged at 40.9, with the number of overtime hours edging up from 3.4 to 3.5.

Meanwhile, the larger economy generated 248,000 new nonfarm payroll workers in September. This means that 7 of the past 8 months have had net job gains exceeding 200,000 per month, averaging 226,667 per month over the first three quarters of 2014. This reflects overall job growth that has improved from last year’s 194,000 average.

In addition, the unemployment rate fell from 6.1 percent to 5.9 percent, its lowest level since July 2008. However, one persistent challenge has been the labor force participation rate, which dropped from 62.8 percent to 62.7 percent. That rate was the lowest since February 1978.

Overall, the data are mostly positive, particularly for the U.S. economy as a whole. It is encouraging to see upward movement in job creation, with the unemployment rate falling to a six-year low. Still, there continues to be sufficient slack in the labor market, and manufacturing employment growth was well below expectations in both August and September. Manufacturers remain mostly optimistic about demand and production, and recent data on hiring plans would seem to indicate stronger job growth than what these figures show. We hope to begin to see healthier employment gains in the coming months. If not, this report tends to support a degree of cautiousness in the economic outlook that might dampen an otherwise positive expectation about the next few months.

Chad Moutray is the chief economist, National Association of Manufacturers. 

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President Obama Embraces Manufacturing Day

President Obama celebrates Manufacturing Day with a tour and a town hall meeting at NAM member Millennium Steel in Princeton, Indiana.

President Obama celebrates Manufacturing Day with a tour and a town hall meeting at NAM member Millennium Steel in Princeton, Indiana.

Manufacturing Day is a wonderful showcase for manufacturers to open their doors to students and local communities to show them how sleek, clean and technology driven manufacturing has become. NAM member Millennium Steel is doing the same – but they’ll have to opportunity to welcome a very special guest today – President Obama. The Princeton, Indiana manufacturer will host the President, along with twenty students from local universities, for a tour of their facilities.

After the tour, those students will join a larger group of invitees, including Millennium employees, suppliers and others, for a town hall meeting with the President.

In the first three years of Manufacturing Day, we have seen incredible growth. This year there will be more than 1,600 events – an 800% increase since the inaugural day in 2012. During his time in office, the President has continually talked up the importance of manufacturing to the United States.

This year for Manufacturing Day, he issued an official Proclamation stating, “Now, therefore, I, Barack Obama, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim October 3, 2014, as National Manufacturing Day. I call upon the people of the United States to observe this day with programs and activities that highlight the contributions of American manufacturers, and I encourage all Americans to visit a manufacturer in their local community.

Today is a celebration, and here at the NAM, we’re extremely proud of the manufacturers in the U.S. who are driving Manufacturing Day’s massive success.

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Super Steel Celebrates Manufacturing Day

Manufacturing Day is almost upon us and more than 1,500 events are scheduled to show case modern manufacturing around the country.

Super Steel has been celebrating Manufacturing Day since its inception and this year they’re hosting Senator Ron Johnson to kick off their event.

“We are very excited to open our doors to the community for an insider’s look at Super Steel,” said Heather Krugler, Corporate Communications Specialist at Super Steel. “Manufacturing Day activities help to create awareness about the value of the manufacturing industry to our community. It provides students a first-hand chance to learn about real career opportunities that are available and we’re hoping to inspire a new generation of manufacturers.”

Click here to learn more and join Super Steel on Manufacturing Day.

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Kansas City Fed: After Slowing in August, Manufacturing Activity Picked Up a Little in September

The Kansas City Federal Reserve Bank said that manufacturing activity picked up a little in September, rebounding after slowing in August. The composite index of general business conditions increased from 3 in August to 6 in September. Through the first nine months of 2014, the main index has averaged 6.7, peaking at 10 in both March and May. As such, we continue to see modest gains among manufacturers in the Kansas City Fed district, with mostly positive expectations about the future.

For instance, the index for production rose from 4 in July to 12 in August, with the percentage of survey respondents saying that output had increased for the month rising from 25 percent to 34 percent. In contrast, one-quarter of those taking the survey said that their production levels were falling. Similar figures could be seen for shipments (up from 2 to 14). Employment shifted into positive territory (up from -4 to 7), with the average workweek also improving (up from -1 to 2). On the downside, the pace of new orders eased marginally, down from 6 to 5.

Several of the sample comments discussed skills shortages. As one respondent put it, “It is still very difficult to fill open positions for any type of worker from production to professional. I am seeing the same issue everywhere in our community.” The other issue of note in the comments was pricing pressures, both for wages and raw materials.  With that said, domestic energy production was mentioned as a positive for manufacturers in the region.

Looking ahead six months, manufacturers in the district remained optimistic overall. While the future-oriented composite index was unchanged at 17, over half of the respondents anticipate higher levels of production and shipments in the next six months. Moreover, the percentage expecting increased new orders rose from 38 percent to 44 percent for the months. Around 30 percent of those taking the survey plan to hire new workers or invest in more capital.

Chad Moutray is the chief economist, National Association of Manufacturers. 

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Iowa Advanced Manufacturing Conference – Register Today!

When you think of manufacturing, these days you think of technology, innovation and revolutionary products. Manufacturing companies are utilizing new technologies to bring costs down and quality and production up. Iowa is on the forefront of this manufacturing resurgence and on October 9th, the Iowa Association of Business and Industry (ABI) will be host an Advanced Manufacturing Conference in Ankeny, Iowa.

This all day event boasts a wealth of information for Iowa’s manufacturers, including a speech on fostering innovation by NAM President and CEO Jay Timmons.

ABI President Mike Ralston is excited about the value to ABI members, saying, “Iowa is a manufacturing state and ABI is excited about bringing manufacturers together for a day of information and insight. This conference features terrific national speakers and the opportunity to hear about the manufacturing policies if Iowa’s two U.S. senate candidates. Don’t miss it.”

It promises to be an excellent program and you can register here. Manufacturing is the backbone of our economy – come support and learn more about how Iowa is leading the way.

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