May
15

Senate Passes WRDA Bill, NAM Urges House to Act

Posted by: Robyn Boerstling under Infrastructure, Transportation on May 15, 2013 @ 4:08 pm

Today the Senate passed the Water Resources Development Act (WRDA) of 2013 by a vote of 83 to 14. This legislation will ensure the continued investment in our coastal and inland waterways.

It’s no secret that our nation’s aging system of inland waterways and ports are in need of modernization. The lack of investment is catching up to us. Our inland waterways system averages 52 service disruptions per day throughout the system. Manufacturers rely on these waterways to move commodities, finished products and inputs vital to their supply chains. Continued disruptions in the system drive up costs and makes manufacturers less competitive.

The WRDA bill passed by the Senate includes important reforms to improve project delivery and streamline the environmental review process for infrastructure projects sponsored by the Army Corps of Engineers. The legislation also includes a Water Infrastructure Finance and Innovation Act (WIFIA) pilot program which will help to leverage investments in critical water infrastructure projects. And importantly the bill assesses the critical issue of under-investment in our ports and harbors by increasing authorized funding from the Harbor Maintenance Trust Fund for harbor maintenance dredging.

The National Association of Manufacturers sent a Key Vote letter to Senators yesterday urging them to support this important bill. We strongly urge the House to take up and pass a WRDA bill as soon as possible. America’s infrastructure is in great need of investment and WRDA provides us an opportunity to start making investments no in our waterways and ports.

 

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May
15

ACA Repeal Vote Has Meaning

Posted by: Joe Trauger under Health Care on May 15, 2013 @ 3:28 pm

This week, the House of Representatives will once again vote on a bill that has little prospect of passage in the Senate and has zero chance of being signed by the President if it were to succeed. By some counts, this is the 37th time Congress will hold a vote to repeal the Patient Protection and Affordable Care Act (ACA). So if everyone agrees that it is likely to fail to become law, why should anyone care?

The NAM did not support the ACA when it was passed by Congress and signed by the President three years ago. Generally, implementation of the law over the past three years has been disappointing. As we reach the mid-point of 2013, the implementation process has become downright alarming, which is no doubt a factor behind the vote the House of Representatives will take on Thursday to repeal the ACA.

In less than five months, beginning on October 1, 2013, Americans are supposed to have access to health insurance through state exchanges that meet the criteria set out by the ACA. Some states are setting up their own exchanges and some are just letting the federal government do it, but that’s not really the issue that’s sounding alarms and feeding anxieties among consumers and businesses alike.

With less than five months before this program goes live, there is a lot we don’t know:

-          What products are available?
-          What are the prices for those products?
-          How do consumers get coverage?
-          How much will the federal subsidies cover?
-          How do we compare plans offered?
-          Who do I call with questions?
-          What is the impact on employer-sponsored coverage?

We don’t seem to be getting very many answers from the department in charge of putting this thing together- unless you consider planning a major public relations campaign an acceptable strategy for implementation. Most people don’t have confidence a public relations campaign will do the trick.

Ultimately, that’s the meaning of the vote being taken by the House of Representatives on Thursday – it is a vote of no-confidence. It is a firm and unambiguous statement of position on a major revision of federal law that will be confronting us not only in the months ahead, but also for many years to come. That is why the NAM supports a piece of legislation that has failed 37 times – and why everyone else should be paying close attention too.

Joe Trauger is vice president of human resources policy, National Association of Manufacturers.

 

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May
15

Producer Prices Continue to Ease in April

Posted by: Chad Moutray under Economy on May 15, 2013 @ 12:15 pm

The Bureau of Labor Statistics reported that producer prices for finished goods were down 0.7 percent in April, extending the 0.6 percent decline in March. Lower energy prices have helped to reduce pricing pressures over much of the past year, with producer prices up just 0.6 percent from where they were 12 months ago. This year-over-year rate is down from 1.4 percent in January and 2.3 percent as recently as October. To further illustrate how inflationary pressures have eased, the year-over-year rate was 4.2 percent in January 2012, with a recent peak of 7.3 percent in July 2011. (See the attached graphic.)

Behind these figures, there were lower food and energy costs for the month. Energy costs were down 2.5 percent in April, building on the 3.4 percent decrease in March. The average price of West Texas intermediate crude oil was $92.02 per barrel in April, down from $95.31 in February and $92.94 in March. This helped to reduce energy costs at both the finished and intermediate goods levels. Meanwhile, food prices were off 0.8 percent, offsetting the increase of the same amount the month before. Reduced meat and vegetable prices were largely responsible for this decrease.

Core producer prices, which exclude food and energy costs, at the finished goods level rose a modest 0.1 percent for the month of April and were up 1.7 percent year-over-year. This number is important, as it indicates that inflationary pressures remain below the Federal Reserve Board’s stated target of 2 percent or less. This frees the Federal Open Market Committee to pursue “highly accommodative” policies to attempt to stimulate economic growth, such as it reiterated at the last meeting.

For manufacturers, the reduction in pricing pressures has been extremely helpful. Raw material costs for the sector fell 0.2 percent in April, and year-over-year, producer prices were down 0.3 percent. The largest decline was in the petroleum and coal products sector, down 1.7 percent for the month and 9.3 percent on an annual basis.

This is not to suggest that rising costs are not still an issue, as they are for some segments of the industry. On a year-over-year basis, the following sectors have seen the fastest growth: wood products (up 10.6 percent), nonmetallic mineral products (up 3.2 percent), food (up 2.5 percent), and beverage and tobacco (up 2.4 percent) manufacturing. At the opposite end of the spectrum, primary metals manufacturers have seen their input costs fall 6.0 percent over the past 12 months.

Chad Moutray is chief economist, National Association of Manufacturers.

 

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May
15

Manufacturing Production Declines for the Third Time in the Past Four Months

Posted by: Chad Moutray under Economy on May 15, 2013 @ 11:38 am

The Federal Reserve Board said that industrial production declined 0.5 percent in April, more than double the consensus expectation of 0.2 percent. For manufacturers, production activity fell 0.4 percent in April, after a 0.3 decrease in March. This was the third time so far in 2013 that manufacturing production has contracted, decelerating the year-over-year pace from 2.4 percent growth in December to 1.3 percent in April.

Manufacturing capacity has also fallen, down from 78.3 percent in March to 77.8 percent in April. This brings the utilization rate back to where it was at year’s end, erasing the capacity gains seen in the first four months of 2013.

Durable goods production fell 0.4 percent; whereas, production in the nondurable goods industries fell 0.1 percent. Declining levels of manufacturing activity were mostly across-the-board, with only four of the 19 major sectors experiencing a gain for the month. The four sectors with higher production in the month were plastics and rubber products (up 0.4 percent), chemicals (up 0.2 percent), computer and electronic products (up 0.2 percent), and food and beverages (up 0.2 percent).

The largest declines were seen in the nonmetallic mineral products (down 1.7 percent), apparel and leather (down 1.6 percent), petroleum and coal products (down 1.5 percent), motor vehicle and parts (down 1.3 percent), and miscellaneous durable goods (down 1.1 percent) sectors.

When combined with Empire State Manufacturing Survey data out this morning, we get a true sense of just the sluggishness of growth for the sector right now. With exports that are barely growing and domestic sales softened by higher payroll taxes, it is clear that the manufacturing sector has still not emerged from pullback in activity that we began to see in the second half of last year. Uncertainties about the economy and the impact of government budget cuts continue to persist, preventing manufacturers from making large gains to output and employment. (continue reading…)

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May
15

Empire State Survey Shows Contracting New Orders, Business Conditions

Posted by: Chad Moutray under Economy on May 15, 2013 @ 9:10 am

The New York Federal Reserve Bank found that manufacturing new orders and business conditions were lower in May. The Empire State Manufacturing Survey’s composite index of general business activity declined from 3.1 in April to -1.4 in May. This is the first contracting level for the index’s main measure since January, ending three months of growth. Still, more than anything, this statistic mostly observed how manufacturing activity has mostly stagnated in the past month or so. Indeed, 48.5 percent of survey respondents said that conditions had not changed, with those saying that they were better or worse nearly offsetting one another at 25.0 percent and 26.5 percent, respectively.

The subcomponents of the index tend to back this view up. The pace of new orders declined modestly on net, with its index down from 2.2 to -1.2. Other contracting figures included shipments (-0.02), unfilled orders (-6.8), delivery times (-3.4), inventories (-8.0), and the average workweek (-1.1). Pricing pressures eased somewhat for the month (down from 28.4 to 20.5), but still suggest decent growth. Nearly two-thirds of survey respondents, though, suggest that raw material prices had not changed in the past month.

Even as the average workweek was lower, it appears that manufacturers continue to hire, with its index down just modestly from 6.8 to 5.7. While 71.6 percent of respondents said that their employment levels had not changed in the past month, 17.1 percent noted increases, and 11.4 percent reported declines. Still, the net growth in hiring is perhaps surprising given the sluggishness of employment growth nationally and the other weaknesses in the Empire State survey.

Continued hiring could perhaps be explained by cautious optimism in the forward-looking measures. Those manufacturers in the New York Fed’s survey who complete this survey remain positive – albeit less so than last month – about increases in new orders, shipments, employment, and capital spending plans. One-quarter of respondents plan to hire more workers, over one-third expect to increase their capital investments, and nearly 40 percent anticipate higher sales.

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

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May
14

STEM Fund Creation Approved for Immigration Reform Bill

Posted by: Joe Trauger under Immigration on May 14, 2013 @ 3:03 pm

The NAM is pleased that Senator Hatch’s amendment just passed by voice vote.  The amendment creates a green card fee whose funds will go to the states to focus on STEM education. This concept is also included in the Hatch Klobuchar I-Squared bill also supported by manufacturers. Investing in domestic STEM education is necessary for the success of US manufacturers. We need to improve the domestic pipeline of talent in the STEM fields to secure the next generation of scientists and researchers. We appreciate Senator Hatch and the committees’ strong support for this effort.

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May
14

Small Business Owner Optimism Moved Higher in April

Posted by: Chad Moutray under Economy, General on May 14, 2013 @ 9:56 am

The National Federation of Independent Business (NFIB) reported that small business owner sentiment moved higher last month. The Small Business Optimism Index rose from 89.5 in March to 92.1 in April, its highest level in six months. As you might expect, an improved sales outlook helped to lift these figures, with the net percentage of respondents expecting higher sales increasing from -4 percent to +4 percent. In addition, small businesses appear to be more willing to increase hiring, as well, with the net percentage planning to hire in the next three months rising from zero in March to 6 percent in April.

This does not mean, however, that small businesses have moved beyond their challenges. Keep in mind that small businesses are said to be growing strongly when the Optimism Index exceeds 100, so we are still quite a way from that. Indeed, the net percentage of business owners saying that the next three months were a “good time to expand” was unchanged at four percent. As with past reports, the top reasons cited for it not being a good time to expand were economic uncertainties and the political climate. (continue reading…)

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May
13

NAM Doubles Down on High-Skilled Immigration Reform

Posted by: Matthew Lavoie under Immigration on May 13, 2013 @ 4:09 pm

As the Senate Judiciary Committee continues to work through debate on S. 744, The NAM, leading a coalition of national and state organizations, sent a letter to Capitol Hill articulating the strong support for provisions in the bill that would deliver significant reforms to the high-skilled immigration program as part of a comprehensive solution.

As the letter notes, “Skilled immigration reform is long overdue. The U.S. economy is struggling to reach its full potential in large part because the demand for highly skilled professionals exceeds the supply; a knowledge gap which will only continue to grow… However, as with any ambitious legislation that would create a new set of requirements for U.S. employers, it is essential to closely examine the new mechanisms proposed for the H-1b and L-1 visa programs and ensure that unintended consequences are anticipated and avoided. Essentially, it should enable U.S. employers to use these visa programs to complement and grow their permanent U.S. workforce, maximizing business and investment activity in the U.S.”

While the NAM and the other organizations are pleased with the initial framework of the bill and have lauded the Gang of 8′s effort to lead on such a critical issue, we are aware that it is not perfect and that improvements are needed. A few specific areas of interest were pointed out, including recruitment, non-displacement and the H-1b Cap Escalator to ensure that comprehensive immigration reform does not interfere with necessary business decisions and that new laws will keep up with the economic times and demand.

Manufacturers are committed to seeing immigration reform through and look forward to working with policymakers to ensure that this landmark bill accomplishes what all interested parties have set out to do – implement a comprehensive solution that provides the workforce manufacturers in the U.S. need to compete and succeed.

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May
13

Retail Sales Move Slightly Higher in April

Posted by: Chad Moutray under Economy on May 13, 2013 @ 11:12 am

The Census Bureau reported that retail sales rose 0.1 percent in April. The consensus estimate had been for a decline of 0.3 percent. With that said, much of the increase could be explained by more spending on autos, with motor vehicle and parts purchases up 1.0 percent. This continues strong growth in the auto sector, with retail sales up 8.8 percent year-over-year.

Outside of autos, retail sales dropped 0.1 percent. The largest drag on purchasing growth stemmed from gasoline station sales, which dropped 4.7 percent in April. This extends the 3.2 percent loss in March, and year-over-year spending was down 4.6 percent. Lower gasoline prices were the primary factor in reducing the amount. The average price of West Texas intermediate crude oil was $92.02 per barrel in April, down from $95.31 in February and $92.94 in March.

The good news is that when you exclude auto and gasoline station sales, retail purchases rose 0.6 percent, suggesting that there were some broader strengths to report beyond the headlines. Businesses with increased sales in April included building materials (up 1.5 percent), nonstore retailers (up 1.4 percent), clothing and accessories (up 1.2 percent), and general merchandise stores (up 1.0 percent). At the same time, there were declines among food and beverage (down 0.8 percent) and health and personal care (down 0.1 percent) stores.

Chad Moutray is chief economist, National Association of Manufacturers.

 

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May
13

NLRB Website ‘Hanging Tough’ with Poster Rule

Posted by: Joe Trauger under Labor Unions on May 13, 2013 @ 11:03 am

Is it possible for an entire federal agency to be in denial? The National Labor Relations Board has been rebuked, rebuffed and reminded by the Courts that its powers are not limitless. Yet, the Board remains curiously silent about the ruling last week that served as a body-blow to an agency that just two years ago was sticking out its chest and poking its proverbial bully-finger at businesses.

The NLRB website still has a page dedicated to an out-of-date poster with no mention of the fact that it has been rejected by the Courts. It’s like returning to your parents’ home and finding they still haven’t torn down the New Kids on the Block poster in your sister’s room. It’s kind of cute, but also a little discomforting. It might be time for the Board to acknowledge its poster idea was ill-conceived and take it down once and for all.

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