After slightly expanding for the first time since January 2015 in June, manufacturing activity in the Kansas City Federal Reserve Bank’s district contracted once again in July. The composite index of general business conditions dropped from 2 in June to -6 in July. This region has been challenged for much of the past two years by pullbacks in the energy sector and the stronger U.S. dollar, and the sample comments suggest that post-Brexit anxieties might have lowered sentiment in this release’s data. New orders (down from 4 to -5), production (down from 12 to -15) and shipments (down from 10 to -17) all returned to negative territory for the month. One-third of all respondents saying that their sales were lower in July, with 28 percent suggesting that sales were higher and 37 percent noting no change. At the same time, the rate of decline somewhat for both hiring (down from -4 to -5) and exports (down from -1 to -7). Interestingly, the average workweek (up from 1 to 7) widened in this report. Read More
The Census Bureau said that retail sales picked up in June, increasing by 0.6 percent and rising for the third straight month. Spending rose by 2.0 percent in the second quarter, a nice improvement from being down 0.6 percent in the first quarter. This suggests that Americans were more willing to open their pocketbooks in recent months – progress after a more cautious stance at the end of last year and earlier this year. Retail sales have increased by 2.7 percent over the past 12 months, up from 2.2 percent in the prior report. Moreover, reduced gasoline prices (down 9.6 percent year-over-year) pulled the headline number lower. Excluding gasoline, retail sales were up 3.9 percent year-over-year, suggesting that consumers have increased their purchases have risen at a fairly decent pace over the past year. Read More
Today, the House passed H.R. 636 to extend the Federal Aviation Administration (FAA) programs until September 30, 2017. While manufacturers are eager for the long-term certainty that a full FAA authorization brings, the 15-month bipartisan extension negotiated between the House and Senate is a next-best option. Manufacturers appreciate the effort to avoid stop-gap extensions, which create instability and disadvantage our job creators when a bipartisan bill like this can’t get over the finish line.
To reach bipartisan consensus, the bill also includes some modest policy provisions on safety and security that were negotiated between House and Senate aviation leaders. Of note, the legislation includes additional guidance on unmanned aircraft systems (UAS), or drone use, specifically for emergency response and critical infrastructure. The innovative applications of drones are endless and show great promise for manufacturers who are looking to UAS technology to inspect and secure facilities and other land-based assets. This guidance takes a practical approach to ensure safety remains the top priority while realizing the potential of this new technology.
With a 15-month reprieve, there is still important work to accomplish, and the NAM urges Congress to seek a long-term bipartisan FAA reauthorization ahead of the September 30, 2017, deadline. Reforms that would enhance the competitiveness of U.S. aerospace manufacturing through improvements to the FAA’s certification process for aircraft design and modifications are critical and should not be delayed. As aviation technology advances and manufacturing becomes more innovative, red tape and bureaucratic inefficiencies pose a risk to our globally competitive and enviable position in this sector. The FAA international certification process must not encumber, but strengthen American exports of aerospace products, which grew its annual trade surplus to a record $82.5 billion in 2015.
Today, Congress acted to keep critical FAA programs and the world’s largest aviation market open without further delay, and manufacturers urge the Senate to quickly get the FAA extension to the president’s desk. However, Congress must now recommit to working on a bipartisan, long-term bill that addresses critical reforms that support manufacturing competitiveness as well as bold funding solutions to tackle growing airport infrastructure demand, which create backlogs that cost American travelers and manufacturers billions of dollars annually.
National Association of Manufacturers President and CEO Jay Timmons issued the following statement after the Bureau of Labor Statistics’ release of the June jobs numbers today:
“While many in Washington may claim today’s report is a positive development, the bottom line is that an increase in the unemployment rate is unacceptable. Our economy isn’t creating jobs fast enough, especially manufacturing jobs. While 14,000 new manufacturing jobs last month is a positive development, we have lost 24,000 manufacturing jobs so far this year. We are not reaching our full potential. Our elected leaders in Washington and candidates on the campaign trail need to give us clear answers. What are they going to do to remove barriers to economic growth? If they need a guide, manufacturers have already outlined a clear agenda to move us forward.
“It’s frustrating for manufacturers to hear both major party candidates pretend the solution is to bash free trade and perpetuate myths about the Trans-Pacific Partnership and trade agreements in general. It’s time for this isolationist rhetoric to stop. It helps no one—except our competitors in the global economy. The United States should be writing the rules on trade. Trade opens up opportunities for manufacturers in the United States to reach new customers with our products, strengthening our economy and creating good jobs.”
This guest blog post is authored by John Bradburn, GM global manager of waste reduction. It is the inaugural blog post in the National Association of Manufacturers’ (NAM) Manufacturing a Sustainable Future blog series.
It’s an exciting time to be working in the automotive industry. Our chairman and CEO, Mary Barra, believes the industry will change more in the next five years than it has in the last 50. GM is restructuring its portfolio to maximize vehicle efficiencies, electrifying vehicles and providing connectivity solutions that promote sustainability. All of this transformation includes our operations and how we make our products. We are committed to responsible manufacturing that conserves our industry’s vital resources. Read More
Though released as part of a package designed to curb cross-border mergers, the Treasury’s broad regulations do little to stop this activity. Instead, these efforts will have a significant negative impact on manufacturers in the United States while stifling investments, job creation and economic growth.
In this week’s Shopfloor podcast, National Association of Manufacturers (NAM) Vice President of Tax and Domestic Economic Policy Dorothy Coleman and NAM Senior Director of Tax Policy Carolyn Lee discuss the implications of these regulations.
On behalf of the National Association of Manufacturers (NAM), I send my deepest condolences to the family and loved ones of Ron Bullock, owner and chairman of Bison Gear & Engineering.
Beyond his leadership at Bison, Ron was committed to advancing the cause of manufacturing in the United States. I was proud to work alongside him at the NAM and The Manufacturing Institute in our efforts to strengthen the manufacturing workforce. As former chairman of the Institute, a member of the NAM Board of Directors and a member of our Workforce and Competitiveness Task Force, Ron gave generously of his time and energy to work selflessly to expand opportunity for all. Our industry is stronger thanks to Ron, and I know many lives have been changed for the better in Illinois and across the country, thanks to his support of our industry and his community. He will be missed at Bison, and we will miss him at the NAM.
The Census Bureau said that new durable goods orders increased 3.4 percent in April, extending the 1.9 percent gain seen in March. Sales of new durable goods orders rose from $228.3 billion in March to $235.9 billion in April. Demand have risen in three of the four months so far in 2016, providing some encouragement for a sector that has experienced its share of softness over the past year. On a year-over-year basis, sales have risen from $231.5 billion in April 2015, an increase of 1.9 percent. Yet, much of that gain came from transportation equipment, particularly aircraft sales. Excluding transportation, new orders for durable goods increased by just 0.4 percent, and over the past 12 months, that figure was down 1.4 percent. This suggests that demand remains somewhat weaker than the headline number would seem to indicate – a sign that durable goods manufacturers continue to be challenged beyond automobiles and aircraft. Read More
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) expanded for the second straight month, albeit at a slower pace in April. The composite index declined from 51.8 in March to 50.8 in April, but even with the decrease, this represented progress in the manufacturing sector after contracting for five consecutive months from October through February. New orders (down from 58.3 to 55.8) and production (down from 55.3 to 54.2) each grew at decent rates for the month despite some easing in this release, and exports (up from 52.0 to 52.5) accelerated, increasing for only the third time in the last 12 months.
Last month’s release helped to fuel the narrative that manufacturing activity was starting to stabilize, and the current data mostly support that view. At the same time, though, manufacturers remain challenged by global headwinds and still-low commodity prices, and a number of economic indicators have been disappointing, highlighting the fact that business’ struggles are still far from over. The sample comments tended to echo this nuanced view of modest improvements, with some respondents noting a pickup in sales while others cited ongoing sluggishness. One’s perspective was likely industry-specific. Read More
This week, I had the privilege of attending Hannover Messe, the world’s largest trade show for industrial technology. This was my third year traveling to Germany for the event, along with a delegation of several NAM members, and this year was certainly special as the United States was the official partner country.
With more than 5,000 exhibitors, Hannover is an impressive demonstration of the power and ingenuity of manufacturers worldwide. This year was our chance to take center stage and show the world the innovation revolution that manufacturers are leading in America—and to create opportunities to reach the 95 percent of customers who live outside the United States, which is critical in today’s global economy.
The NAM was proud to be a sponsor and partner with the U.S. Department of Commerce to ensure that manufacturers in the United States had an impressive showing and that manufacturing was a central focus for the many members of the administration, including the president, who attended.
The show officially kicked off at the Sunday afternoon opening ceremonies. President Barack Obama became the first president to attend the event, and he joined German Chancellor Angela Merkel to welcome the world to the 69th Hannover Messe. The two world leaders not only shared a stage for their remarks; they also shared a united cause—to strengthen manufacturing.
Following the opening ceremonies, I joined President Obama and Chancellor Merkel at the Schloss Herrenhausen for an engaging discussion with global business leaders centered on promoting robust economic growth and a joint commitment to expanding trade opportunities.
With President Obama and members of his administration on the ground for the trade show, the trip was also a chance to advance many of manufacturers’ top priorities. Secretary of Commerce Penny Pritzker is one of the strongest advocates for manufacturers in America, and I am proud that we were able to work so closely with her and her great team.
At the top of the list of priorities for this trip was the Transatlantic Trade and Investment Partnership (TTIP), which would join the United States and the European Union (EU) in the largest economic and trade partnership. We were able to discuss TTIP multiple times with U.S. Trade Representative (USTR) Mike Froman and Deputy USTR Michael Punke and brought our delegation to meet with EU Trade Commissioner Cecilia Malmström, emphasizing the importance of strong and ambitious outcomes, including a strong shared standard, to benefit manufacturers of all sizes on both sides of the Atlantic. (Read more from NAM Vice President of International Economic Affairs Linda Dempsey here.)
A common theme during our conversations with everyone in Hannover, including U.S., German and EU policymakers, manufacturers large and small and our European business advocacy partners, was how best we can win the “war on trade.” In the face of increasing populist rhetoric on the campaign trail in the United States and a vocal protest wave in Europe, we need to work closely together to explain what TTIP is and how it will create new opportunities for manufacturers, improve growth in our communities and benefit our families. Manufacturers must tell our story of the transformative impact that the agreement will have in new ways to cut through the myths propagated by many NGO and activist groups.
Trade is essential to manufacturers’ success, as it allows us to reach the customers living outside our borders—the very customers exploring the modern technology and impressive products on display at Hannover.
Monday was a packed day, touring the facilities, exploring the exhibits, talking with U.S. and European officials and meeting with U.S. manufacturers and friends who had also crossed the Atlantic for the event.
Any visitor would come away with a clear sense that modern manufacturing is vastly different from our past. It’s sleek, high-tech and changing at a rapid pace. Even in just three years, I’ve witnessed dramatic advances in the technology on display at Hannover.
I joined U.S. Deputy Secretary of Commerce Bruce Andrews for a live Facebook chat about what we had witnessed, the importance of trade and the promise of modern manufacturing and the Internet of Things.
At a business summit on the fairgrounds, President Obama and Chancellor Merkel were joined by U.S. and German CEOs and officials, including Secretary Pritzker, to discuss the future of transatlantic economic relations. Unsurprisingly, this was a recurring theme throughout the trip—and for good reason!
Tuesday morning, I was grateful for the chance to talk with Siemens employees and customers at their exhibit. Siemens has been a fantastic partner in preparing for Hannover Messe, and it was great to see many of their innovative solutions on display.
As I said in my remarks, “When you look around this impressive venue, there’s no doubt the world is changing—and changing for the better. Manufacturers are leading the way and driving this change every day. But there’s something that doesn’t change. Manufacturers are still improving our world, offering hope and opportunity through the people we employ, the lives we touch and the products we make.”
Before departing, I led a roundtable discussion with Secretary Pritzker on how we win the battle on trade. We were joined by NAM member companies—Liberty Pumps, UL, UPS and Texas Instruments—as well as leading European advocacy groups and German officials. Expanding opportunities to sell our products overseas means winning the battle for jobs in the United States!
As always, I left Hannover energized and proud of our industry. There’s always work to do, and we must continue to take our message to our elected officials so that the right policies are in place for our success. But there should be no doubt: manufacturers continue to lead the world by creating solutions and building the future.