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Exporters for Ex-Im: Small Seattle Firm Helps Save Lives With Ex-Im Bank

In Seattle sits a small company that helps save lives in 65 countries.

Simulab Corp. helps doctors in training get familiar with all the delicate intricacies of performing life-saving procedures before they operate on an actual person. The company makes by hand anatomical models for training physicians that can be sold throughout the world because the U.S. Export-Import Bank is able to offer credit guarantees to its customers.

SimulabPhoto2Dave Garland, Vice President of Sales at Simulab, said he has personally sent letters to lawmakers in Washington State to urge them to reauthorize the Ex-Im Bank, which will expire if Congress doesn’t act by September 30. Without the Ex-Im Bank, Mr. Garland said his company’s sales abroad in places like the Middle East, Europe and Latin America will suffer.

And yet Simulab is just one of the hundreds of small and mid-sized firms that rely on the Ex-Im Bank to expand abroad and keep jobs in the United States. The Ex-Im Bank has supported 1.2 million jobs in the United States in the past five years.

Simulab has about 75 employees, and Mr. Garland said the company started using the Ex-Im Bank in 2011. Since then, Simulab has more than tripled its sales abroad.

Mr. Garland said the models his company makes are time- and labor-intensive to manufacture. Because the demands for anatomical accuracy are important to the success in teaching physicians, their models are handmade and require skilled employees with an attention to detail.

He said the company wants Ex-Im Bank reauthorized so Simulab can continue to support its employees and grow.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx

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Manufacturers applaud bipartisan House passage of H.R. 6

This afternoon, the House passed H.R. 6, the Domestic Prosperity and Global Freedom Act, by a vote of 266-150. 46 Democrats joined 220 Republicans in supporting the NAM’s position and voting in favor of the bill.

The NAM supported H.R. 6 because it ensures that market forces, rather than bureaucratic inertia, govern international trade by providing a 30-day deadline for the DOE to approve or deny pending LNG export applications. It doesn’t prejudge outcomes or remove any legal obligations; it merely ensures that projects sink or swim on their merits, not because of regulatory delay at the DOE.

To view NAM’s Key Vote letter, click here. To view the roll call of the vote, click here.

 

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Free Speech Under Assault

Some Senators seem committed to diminish an important aspect of our individual liberties by proposing to chill and limit the free speech rights of job creators. This unfortunately was manifested yet again as the latest iteration of the DISCLOSE Act was introduced yesterday. Free speech is a founding principle that defines who we are as a nation. Guaranteed to us by the First Amendment, the freedom of speech is at the bedrock of the democracy that made our country great. Unfortunately today this important individual liberty is under attack.

Continued and persistent efforts to erode speech based on the identity of the speaker in order to gain a political advantage are anathema to the principles for which our founding fathers fought. Today we must push back on these proposals on all fronts. Defending the right to speak freely without fear of reprisal is a fight that never ends. Proponents of such limits are seeking the most sweeping changes possible, as Senate Majority Leader Reid has even proposed the most drastic step of amending the Constitution to restrict speech about our own elected officials. This is the latest in a series of threats to individual liberty that I laid out early this month in remarks at the Adam Smith Dinner.

The NAM remains steadfast in our commitment to protecting the First Amendment rights for all Americans. As a nation, we are strongest when our right to voice our opinions is unimpeded. However, this important individual liberty should not be safeguarded only for politically favored groups. Manufacturers have a right to weigh in on the policies that will determine our future economic growth and global competitiveness, and we oppose the recent efforts by some in the Senate to hinder our right to petition officials that represent us in Washington.

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Senator Flake Offers Commonsense Ozone Bill

The Environmental Protection Agency (EPA) can’t keep up with the pace of its own regulatory schedule. That is not intended to be a slight on the agency or its staff, it’s a fact stemming from a combination of factors – NGO lawsuits, a President with an overly aggressive regulatory agenda and an out-of-date environmental statute that requires review of air quality standards before they are even implemented. If the regulators can’t keep pace with their own regulations, I assure you manufacturers – who need to make investment decisions looking years into the future – can’t either.

While the rate at which air regulations are issued and then revised and then issued again has been a problem for several years, the issue is being amplified as the Administration considers new ozone regulations that could be the most expensive environmental regulation issued in this era of the Clean Air Act. The EPA last issued new ozone standards in 2008 and still has yet to issue its final implementing regulations for the 2008 standard. Meanwhile, the agency is under court order to consider revising that still-unimplemented standard by December of this year. And because of the five-year review requirement for all National Ambient Air Quality Standards (NAAQS), after the agency issues this round of new ozone standards, it will almost immediately have to begin work considering still newer (and likely stricter) ozone standards. This never ending cycle of regulations, reviews and new regulations adds to a regulatory environment where the uncertainty of what the new requirements will be is becoming almost as burdensome as the actual regulations. This isn’t working. Something needs to change.

Senator Flake’s (R-AZ) Ozone Regulatory Delay and Extension of Assessment Length Act of 2014 would provide some necessary relief to manufacturers by setting NAAQS reviews on a ten-year cycle. This makes sense. From 1980 to 2012, emissions of the six principal air pollutants the EPA regulates has dropped by 67%. By EPA’s own estimates, ozone precursor emissions are expected to drop another 25% from current levels – in part because of a slew of other regulations that still have not been fully implemented.  Adding another layer of new regulations now will only add costs and uncertainty to a manufacturing sector that, if permitted to, will continue its renaissance driving economic growth and jobs in the process.

Manufacturers need our elected officials to provide some relief to a regulatory system that has truly become an ORDEAL to keep up with. For that reason, the National Association of Manufacturers commends Senator Flake for his leadership in proposing this commonsense bill and encourages all U.S. Senators to follow suit and support this effort.

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Exporters for Ex-Im: Protecting the Responsible Growth of American Manufacturers

Providing the tools for developing countries to grow their agricultural ecosystem and feed their nation is a key mission of AGCO Corporation, an agricultural equipment manufacturer headquartered in Duluth, Georgia. Built on the core values of accountability, integrity, respect, team spirit and transparency, AGCO manufactures tractors, combines, sprayers, hay equipment and grain storage systems for customers across the globe.

Today, AGCO remains highly committed to responsible growth as they strive to conserve natural resources and protect the environment from harmful influences. Internally as well, growth of the business is first and foremost focused on cultivating a highly trained and motivated workforce and developing long-term career opportunities for all employees.AGCO

Approximately 80% of AGCO’s business is conducted outside of the United States, and part of this business utilizes the U.S. Export-Import Bank (“Ex-Im”) for the necessary financing to compete with their foreign counterparts in geographical areas like Africa, Asia and Eastern Europe where agriculture is rapidly developing. As the business grows, so do the jobs. With factories in Illinois, Kansas, Minnesota and Alabama, the company currently employs 5,700 Americans.

AGCO’s grain storage and protein production division, GSI, has actively used Ex-Im bank to bring grain storage solutions to emerging markets. In 2012 alone, Ex-Im bank facilitated the financing of more than $35 million in grain storage sales in Eastern Europe and GSI continues to approach Ex-Im for support in Africa and Asia, where local financing solutions can be difficult.

Michael Cully, Vice President of Government Affairs for AGCO says, “The Ex-Im Bank is a great benefit to Americans because it helps to grow jobs and allows U.S. companies to compete with their global counterparts in what is an active competitive market today – all while generating revenue.”

In fact, AGCO’s grain storage competitors across the northern border in Canada and are just as eager to grow their market share. “We hear consistently that the Canadian export credit agencies are easy to work with, and that matters to potential customers. If the Ex-Im Bank is not reauthorized, it would greatly complicate our ability to finance sales and jeopardize our ability to maintain and grow our international grain storage customer base. “ Cully continued.

As AGCO plans for future growth, the Ex-Im Bank is an important factor in ensuring their continued success. Unless Congress moves to reauthorize the Bank in September, the critical contributions companies like AGCO provide the U.S. economy will be at risk of benefiting our international competitors instead.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx

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Internet Regulation Will Slow Manufacturing Growth

Manufacturers are innovation leaders. They leverage technology in every aspect of their business. It is in their products, their processes, and pervasive throughout their enterprise. All types of technology including software, sophisticated machines, and especially the internet have led to unprecedented growth in the manufacturing sector. Unfortunately, we continue to see more calls for regulation of the internet that if answered will only hinder manufacturing growth.

The issue of internet regulation and the negative impact it will have on manufacturing is not new to the NAM. We recently weighed in with the D.C. Circuit that the FCC did not have the authority to adopt rules to regulate the internet. The Court’s decision supported our position. And just today we heard Members of Congress and witnesses agree during a hearing of the United States House of Representatives Judiciary Committee that more regulation will stifle investment and innovation

Despite strong opposition by the courts, many policymakers, and especially manufacturers, some in Congress and the Administration still want to make another attempt to regulate the internet. As manufacturers utilize communications technologies to connect their shopfloors, their products, and their customers the NAM will continue to stress our member-driven policy: Regulations that have the potential to dampen private industry’s incentive to invest in technology and the internet will hurt the manufacturing comeback.

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Monday Economic Report – June 16, 2014

Here is the summary for this week’s Monday Economic Report:

Despite a very weak start to 2014, there is an expectation among manufacturers that the second half of the year will be better than the first. Indeed, average manufacturing sales forecasts in the latest NAM/IndustryWeek survey were the highest in two years, with capital investment and hiring plans also moving in the right direction. Indeed, these data points were consistent with 4.0 percent production growth in the sector between now and the fourth quarter of this year, and roughly 86 percent of respondents were either somewhat or very positive in their outlook. These findings mirrored similarly optimistic assessments from business economists, who predict real GDP growth of 3 percent or more in each of the remaining quarters of 2014, with industrial production up 3.7 percent for the year as a whole.

Despite more upbeat perceptions for the coming months, concerns continue to linger. Respondents to the NAM/IndustryWeek survey remain frustrated with political inaction and the slow pace of economic growth. The top business challenges continue to be rising health care costs (72.7 percent) and an unfavorable business climate (71.4 percent). When asked about policy priorities for the next few years, slowing entitlement spending (84.4 percent), finding a long-term budget deal (82.9 percent), reducing regulatory burdens (81.9 percent) and controlling health care costs (78.5 percent) were at the top of the list.

At the same time, consumers remain cautious. The University of Michigan and Thomson Reuters reported that consumer confidence edged lower for the second straight month, although sentiment has not changed much in the first six months of this year. There are persistent worries about labor and income growth, which appear to be preventing Americans from being more optimistic about the future.

These anxieties might also have been a factor in the weaker-than-expected retail spending numbers for May. While retail sales rose for the fourth consecutive month and purchases continue to reflect a rebound from winter-related softness, May’s increase of 0.3 percent was about half of what was predicted. In fact, excluding motor vehicles and gasoline station sales, spending was flat for the month. Nonetheless, one could also paint a more positive picture, with retail sales up 2.2 percent since November and 4.3 percent year-over-year. So perhaps May’s figures were just a pause in an otherwise decent upward trajectory for consumer spending. Small business owners were more upbeat about sales expectations in the latest National Federation of Independent Business (NFIB) survey. The NFIB’s Small Business Optimism Index reached its highest level in May since September 2007, or before the recession began.

Along those lines, the number of nonfarm job postings reached a pre-recessionary high in April. For manufacturers, job openings have increased in the past two months but remain below their recent peak in November. April’s increases in the manufacturing sector were primarily from durable goods firms. Net hiring (or hires minus separations) was also up for the month in manufacturing; however, it also suggests weaker employment growth in early 2014 versus the more robust hiring activity in the second half of 2013. This leaves room for improvement for the coming months.

This week, we will get several economic indicators on manufacturing and housing activity. For example, this morning, the Federal Reserve is expected to show a rebound in industrial production for May after the decline in April, and we will be looking for similar signs in surveys from the New York and Philadelphia Federal Reserve Banks. Tomorrow, we will get new data on housing starts and permits, with the consensus being around 1.04 million annualized units in May, down slightly from 1.07 million in April. On the monetary policy front, we have seen increased pricing pressures of late, even as core inflation for producers declined in May. Yet, the Federal Reserve is not expected to alter its course this week when the Federal Open Market Committee meets. Other highlights this week include new information on consumer prices, leading indicators and state employment.

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

manufacturing job openings - jun2014

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KARLEE Celebrates 40 Years of Excellence

Today is a big day in Garland, Texas, as KARLEE threw open its doors to celebrate its 40th anniversary in business. Despite humble beginnings as a one-man operation performing precision machining started by Lee Brumit in a garage, KARLEE is a picture perfect American success story. Their outstanding work servicing the telecom, defense, medical, energy, aerospace and commercial industries has vaulted them to an impressive, modern manufacturer with 400 employees and 3 locations.

Now owned and operated by Jo Ann Brumit, the company is poised for even greater success. Jo Ann has received the prestigious Malcolm Baldrige National Quality Award presented by the President of the United States for business excellence; Athena Award for women in leadership; Texas Quality Award; Baylor University Well Managed Business Award and the Entrepreneur of the Year Award for Manufacturing by INC. Magazine, Ernst & Young. It’s no surprise that KARLEE has been named as on of the Dallas Top 100 and recognized with the Greater Dallas Business Ethics Award.

Today’s festivities included an open house, luncheon, and an evening reception. We at the NAM salute KARLEE’s commitment to excellence and here’s to 40 more great years!

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Manufacturing Summit Starts Off With a Bang

Today marked the beginning of the National Association of Manufacturing’s yearly summit.  The summit is the highlight of the manufacturing advocacy community.  Attended by over 400 manufacturers both large and small, it offers members an opportunity to discuss the industry’s progress over the past year as well as its future goals.  While this year’s summit offered a string of new speakers, the message remained unwaveringly clear.  Growth and Innovation is what drives the manufacturing industry.

The event kicked off with keynote address from Vice President Joe Biden.  His speech lauded manufacturers as the drivers of both global and domestic innovation.  The Vice President noted that this progress can be sustained with reinvestment into American infrastructure, immigration policy reform, and addressing our tax code.  A strong and unified approach on these issues is crucial to the current and future success of manufacturing in the U.S.

Directly after Biden’s speech, members headed to the Hill to meet with lawmakers.  With hundreds of meetings scheduled, manufacturing leaders and advocates are urging policymakers to make bi-partisan progress on key growth issues.  On Wednesday, Senator Chris Coons (D-DE) will speak to members on the second day of the summit.  The speech promises to provide manufacturers and advocates with an even more prominent and vocal message for the Hill.

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Monday Economic Report – June 2, 2014

Here is the summary for this week’s Monday Economic Report:

The U.S. economy contracted for the first time in three years in the first quarter of 2014. Real GDP fell 1.0 percent in the quarter, a fairly substantial revision from the earlier estimate of a gain of 0.1 percent. Much of the storyline behind these figures was the same, with consumer spending on services being the only real bright spot. Purchases of durable and nondurable goods were positive, but weather-related challenges dampened both. Weaknesses in business spending for equipment and structures, residential housing investments and reduced goods exports were all major drags on growth.

The bulk of the downward revision stemmed from lower inventory replenishment. Ironically, that could lead to more inventory spending in the second quarter with stocks running lower. In addition, other figures also point to a rebound in activity during the spring months, with my forecast for second-quarter real GDP at 3.8 percent. Still, U.S. and global growth have started off 2014 much slower than anticipated, particularly when averaging together the first and second quarters. For the year, we now expect growth of 2.3 percent, which would indicate a slight downgrade from the more optimistic outlook predicted coming out of the strong momentum during the second half of last year.

The spring rebound in the manufacturing sector can be seen in other data released last week as well, albeit with some mixed news overall. For instance, new durable goods orders rose 0.8 percent in April, building on strong growth in February and March. Nonetheless, excluding transportation, new durable goods orders were up less robustly, suggesting some broader weaknesses beyond the headline monthly figure. Moreover, new durable goods shipments declined 0.2 percent in April, even as the longer-term trend remains positive.

At the same time, regional Federal Reserve Bank surveys show a similar recovery for manufacturers, but also some easing in the latest data. Manufacturing activity in the Dallas Federal Reserve district has now expanded for 12 straight months, but the pace of growth for new orders, production, capacity and employment eased in May. The Richmond Federal Reserve’s report also observed a deceleration in sales growth; however, it also noted a pickup in shipments and hiring. Perceptions about the current business outlook were unchanged, even as conditions had improved from winter weather earlier in the year. Looking ahead six months, respondents in both Dallas and Richmond remain mostly upbeat, even if this enthusiasm was a bit weaker in May.

The two surveys also indicated a rise in pricing pressure expectations, consistent with other reports showing some higher raw material costs. Indeed, prices for personal consumption expenditures have risen 1.6 percent year-over-year, up from 0.9 percent in February and 1.1 percent in March. April’s increase stemmed largely from higher energy prices, with food costs also up modestly (but at a slower pace than the month before).

Speaking of consumer spending, Americans decreased their purchases by 0.1 percent in April following two months of healthy increases. Year-to-date, personal spending has grown 1.6 percent, with purchases up 4.3 percent over the past 12 months. Meanwhile, the two consumer confidence measures—one from the Conference Board and the other from the University of Michigan and Thomson Reuters—moved in opposite directions in May, even as they continue to reflect rising sentiment over the past few months, particularly since the government shutdown.

This week, the focus will be on jobs and trade. We will get new employment numbers for May on Friday, which we hope will build on April’s strong figures. Manufacturers have averaged just more than 13,000 workers per month since August, and the expectation is for job growth in the sector around 10,000 or so in May. The consensus forecast is for 215,000 additional nonfarm payroll workers for the month, suggesting decent hiring. On the international front, we will learn if manufactured goods exports can improve from the rather disappointing rates so far in 2014, up just 1.1 percent in the first quarter of this year relative to the same three months in 2013. Other highlights include new data on construction, factory orders, productivity and Purchasing Managers’ Index figures from the Institute for Supply Management.

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

percent change in real GDP - jun2014

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