Tag

Canada

U.S. and Canadian Businesses Speak Out: Removing Wood Pallet Exemption Would Undermine Trade and Commercial Opportunities

By | Shopfloor Policy, Trade | No Comments

President Barack Obama’s meetings last month with Canadian Prime Minister Justin Trudeau emphasized the value of open trade and investment between the two countriessome $2 billion per day between the two countriesas a linchpin of the relationship. Possible regulatory changes related to wood packaging, however, would impede that commercial relationship, adding unnecessary costs that would harm business and consumers in both the United States and Canada.

The NAM on Friday joined 37 other organizations on both sides of the U.S.Canada border in a letter urging the United States Department of Agriculture (USDA) and the White House Office of Information and Regulatory Affairs to halt efforts to impose these new rules. Our collective organizations represent companies that are supporting millions of jobs and hundreds of millions of dollars in economic activity, working for industries in nearly every area of bilateral trade, from aerospace to retail, from autos to food and beverages and from heavy equipment to cosmetics. Read More

NAM Highlights Key Trade Priorities Ahead of Prime Minister Trudeau’s Visit

By | Shopfloor Policy, Trade | No Comments

This week, newly elected Canadian Prime Minister Justin Trudeau will arrive in Washington for a state visit—a demonstration of the deep ties that connect the United States and Canada—and the first state dinner for a Canadian leader in nearly two decades.

The United States and Canada share a vibrant trade and investment relationship. Canada had long been the largest U.S. trading partner and ranked second last year behind only China. Canada remains the largest U.S. export market for manufactured goods (totalling $246 billion), and Canada is the United States’ third-largest supplier of manufactured goods imports (totalling $208 billion). Cross-border U.S.-Canadian investment remains high, with Canada the largest destination for U.S. foreign direct investment in manufacturing at $107 billion, and Canadian investment in manufacturing in the United States the eighth largest source at $57 billion.

Despite our vast network of commercial ties with Canada, the two countries are facing several priority trade policy and investment issues. As Prime Minister Trudeau and his delegation meet with President Obama and other key U.S. government officials, manufacturers urge them to address these topics as they consider how to further enhance our economic relationship. Read More

Global Manufacturing Economic Update – June 11, 2015

By | Economy, Trade | No Comments

Here is the summary for this month’s Global Manufacturing Economic Update: 

There continue to be mixed assessments of the economy, including from reports released last week. For instance, the Organisation for Economic Co-operation and Development (OECD) lowered its forecasts to 2.0 percent growth for the United States, with the global economy growing just 3.1 percent. This fell from the 3.1 percent and 3.6 percent, respectively, seen in its November 2014 outlook. It also mirrors the downgrade of the National Association of Business Economists’ (NABE) estimated U.S. growth this year, from 3.1 percent in the March survey to 2.4 percent now. Business leaders were also less upbeat in the latest National Association of Manufacturers (NAM) Manufacturers’ Outlook Survey, with the headline index down from 59.9 in the first quarter to 51.7 in the second quarter. Read More

Global Manufacturing Economic Update – April 17, 2015

By | Economy, Trade | No Comments

Here is the summary for this month’s Global Manufacturing Economic Update: 

The global economic environment remains challenged, even as it continues to experience modest growth overall. The J.P. Morgan Global Manufacturing PMI, for instance, observed the highest production levels since August. Yet, the overall pace of expansion has clearly eased over the past few months. Along those lines, manufacturers in half of the top 10 markets for goods manufactured in the United States reported declining levels of activity in March, up from just two countries in February. Three Asian economies shifted into contraction territory for the month: China, Hong Kong and South Korea. In addition, Brazil and Canada remained challenged, with the latter struggling on lower crude oil prices. Manufacturing in the emerging markets also stagnated in March, with weaknesses in a number of nations counteracting progress in others. Read More

Global Manufacturing Economic Update – March 13, 2015

By | Economy, Trade | No Comments

Here is the summary for this month’s Global Manufacturing Economic Update: 

Manufacturers are facing some significant headwinds from sluggish growth abroad and from a U.S. dollar that has strengthened sharply over the past few months. According to the Federal Reserve Board, the trade-weighted U.S. dollar index against major currencies has risen from 75.6968 on July 1 to 91.5660 on March 6, a 21.0 percent increase. Along those lines, the euro has fallen to its lowest levels since January 2003. It peaked in 2014 on May 6 at $1.3924 for each euro. On March 12, it closed at $1.0640 to the euro, with some expectations that it will move to parity soon. It last reached parity in November 2002. Overall, these developments could hurt the ability of manufacturers in the United States to grow exports. (Some recent comments from me in the media on this topic can be found in the Financial Times, The New York Times and The Washington Post.) Read More

Global Manufacturing Economic Update – February 13, 2015

By | General | No Comments

Here are the files for this month’s Global Manufacturing Economic Update:

Let’s start with some good news. U.S.-manufactured goods exports reached an all-time high in 2014, surpassing $1.4 trillion for the first time, according to Trade Stats Express. Moreover, goods exports from manufacturers grew 1.9 percent in 2014, with exports to the top five markets higher for the year. At the same time, export growth decelerated from the 5.8 percent and 2.6 percent rates of 2012 and 2013, respectively. Sluggish growth abroad and a strengthened U.S. dollar continue to challenge demand. In December, the U.S. trade deficit widened to its highest level of 2014, and the average monthly deficit for the year exceeded that of 2013 ($42.09 billion per month versus $39.70 billion, respectively). Read More

Global Manufacturing Economic Update – January 9, 2015

By | Economy, Trade | No Comments

Here is the summary for this month’s Global Manufacturing Economic Update: 

The minutes of the Federal Open Market Committee’s December 16–17 meeting continue to reflect increased optimism about the U.S. economy, with relative strength in both output and labor markets. Federal Reserve participants expect U.S. real GDP growth of 2.6 to 3.0 percent in 2015, with the unemployment rate falling to 5.2 to 5.3 percent and core inflation remaining below its stated goal of 2.0 percent. At the same time, they expressed worries that global economic challenges might dampen growth here. Specifically, the minutes say the following on this topic:

Many participants regarded the international situation as an important source of downside risks to domestic real activity and employment, particularly if declines in oil prices and the persistence of weak economic growth abroad had a substantial negative effect on global financial markets or if foreign policy responses were insufficient. Read More

Global Manufacturing Economic Update – December 12, 2014

By | Economy, General, Trade | No Comments

Here are the files for this month’s Global Manufacturing Economic Update:

It has become increasingly clear over the past few weeks that North America stands out as a bright spot in an ever-challenging global economic environment. Real GDP in the United States grew an annualized 4.2 percent in the second and third quarters, and U.S. manufacturers remain mostly optimistic about the next year. Indeed, the U.S. economy is expected to expand by around 3 percent, its fastest rate in a decade. Likewise, Canada and Mexico — our two largest trading partners — have made improvements in their respective economies since earlier this year. Canada has the distinction of having the highest purchasing managers’ index (PMI) of any of our top 10 trading partners, holding steady in November at 55.3. Read More

Global Manufacturing Economic Update – July 11, 2014

By | Economy, General, Trade | No Comments

Here is the summary for this month’s Global Manufacturing Economic Update: 

The global economy improved slightly in June, showing some signs of stabilization from weaknesses in prior months. The J.P. Morgan Global Manufacturing Purchasing Managers’ Index (PMI) increased from 52.1 in May to 52.7 in June, its fastest pace since February. Various measures of activity were mostly higher, including new orders, production and employment. Behind this figure, the data also reflected economic progress in countries such as China, Hong Kong and Japan, each of which shifted from a contraction in May to slight growth in June. As a result, just 2 of the top 10 markets for U.S.-manufactured goods had PMI values below 50 in June, an improvement from the five that registered contracting levels in May. Our largest trading partner’s values, the RBC Canadian Manufacturing PMI, increased from 52.2 to 53.5, reaching its highest point since December.

Europe dominated economic headlines on July 10, with worries about a large Portuguese bank and falling industrial production figures for France (down 1.7 percent), Germany (down 1.8 percent) and Italy (down 1.2 percent). Indeed, European growth has continued to ease, with the Markit European Manufacturing PMI down from 52.2 to 51.8. On the positive side, manufacturing activity has now expanded for 12 straight months, but the economy in the Eurozone remains subpar overall. Real GDP was up just 0.2 percent in the first quarter and is expected to increase around 1 percent in 2014 as a whole. Still, growth varied widely from country to country. France sits on one end of the spectrum, with manufacturing sentiment worsening and falling to a six-month low. Meanwhile, Ireland and Spain experienced multiyear highs for sales growth, and new orders in the United Kingdom expanded rather robustly (up from 59.5 to 61.0).

In the emerging markets, manufacturers in Brazil, Russia, South Korea and Turkey reported contracting levels of activity in June, although Russian production grew for the first time in six months and South Korean exports began to stabilize. Overall, however, manufacturing activity in the emerging markets expanded for the second straight month, spurred higher by better news in some Asian economies. Stronger sales and output resulted in increased manufacturing PMI data for China, India, Indonesia and Taiwan. India also benefited from greater export growth. Next week, we will get new data on Chinese GDP, industrial production, fixed-asset investment and retail sales. Real GDP is expected to pick up slightly, from the 7.4 percent annualized growth rate experienced in the first quarter, with a consensus estimate of around 7.5 percent. While this is a marginal improvement, it also continues to reflect decelerating rates of growth from what was experienced in the past.

Looking at U.S. trade flows, petroleum helped to narrow the U.S. trade deficit in May, with more exports and fewer imports improving the headline figure. This continues a trend seen over the past few years whereby improved energy production in the United States has slightly helped balance the trade picture. Outside of petroleum, the numbers were less favorable. The average monthly deficit so far in 2014 reached $43.65 billion, higher than the $39.70 billion average for all of 2013. In addition, U.S.-manufactured goods exports continue to grow at a disappointing rate, up just 0.5 percent year-to-date versus this time last year using non-seasonally adjusted data. Nonetheless, exports of manufactured goods increased to all five of our largest trading partners through the first five months of this year: Canada, Mexico, China, Japan and Germany. That is an encouraging sign, even if we would like to see faster growth in our international sales overall.

On the policy front, the congressional debate on reauthorization of the Export-Import (Ex-Im) Bank continues to move forward, while action on other trade legislation is currently stalled. The World Trade Organization (WTO) officially began environmental goods negotiations, while both the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP) continue. The U.S. trading relationship with key partners, including India, China and Russia, continues to be a focus.

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

china pmi - jul2014

Global Manufacturing Economic Update – March 21, 2014

By | Economy, Trade | No Comments

Here is the summary for this month’s Global Manufacturing Economic Update:

Headlines around the world have focused on the Russian annexation of the Crimean peninsula from the Ukraine and the mysterious disappearance of a Malaysian Airlines jetliner. Each of these events injects an element of uncertainty in the global dynamic picture. Indeed, so far in 2014, the global economy has not built on the strong momentum that we saw in the second half of 2013. A number of winter storms in the United States, financial struggles in the emerging markets and decelerating growth in China have combined to soften growth in recent months. Yet, we should not lose track of the longer-term trend, as markets in many of our largest trading partners have made significant progress over the course of the past year, with modest growth rates overall.

The JPMorgan Global Manufacturing Purchasing Managers’ Index (PMI) increased from 53.0 in January to 53.3 in February, its highest point since April 2011. New orders, exports and hiring rose. That said, this global measure might also be skewed higher by stronger performance in the United States, with the Markit U.S. Manufacturing PMI jumping from 53.7 to 57.1, its fastest pace in nearly three years. Sales and production both rebounded in February after weather dampened demand and hampered output and shipments in January. Elsewhere, there were signs that manufacturing activity eased somewhat in February in a number of areas, with a definite split between the developed nations and emerging markets. The HSBC Emerging Markets Index dropped from 51.4 to 51.1, influenced by contracting levels of activity in China, Russia and South Korea.

Speaking of China, its manufacturing PMI has now contracted for two straight months, and a number of economic indicators suggest that its economy has continued to decelerate. Industrial production has slowed from 10.4 percent in August to 8.6 percent in February, and fixed asset investment and retail sales have also eased significantly. These data points suggest that real GDP might fall below the 7.7 percent rate seen in the fourth quarter. Still, growth remains strong overall, even if these figures are well below the rates of growth that many businesses have become accustomed to. In other news, the Bank of China has worked to weaken its currency over the past month, with the Chinese yuan depreciating more than 2 percent since mid-February. The Chinese government has engineered this devaluation, it says, to help fend off speculators; yet, it is also important to note that the yuan has generally appreciated against the U.S. dollar since 2005. (See the attached graphic.)

Looking at our largest trading partners, 8 of the top 10 markets for U.S.-manufactured goods had expanding levels of manufacturing activity, with five countries experiencing slightly faster growth in February than in January. For example, the Canadian economy grew marginally faster in the fourth quarter, with real GDP up 2.9 percent in the fourth quarter. Manufacturing capacity utilization and shipments have also picked up recently, and the RBC Canadian Manufacturing PMI increased from 51.7 to 52.9, suggesting modest growth.

Meanwhile, in Europe, sentiment dipped somewhat in February, but the trend since last summer remains positive. New orders, exports and production eased a little for the month, but growth still remained healthy overall. Real GDP increased 0.3 percent in the fourth quarter, but growth is expected to rise to 1.1 percent for 2014 as a whole. While that indicates very slow growth, it is enough to provide a psychological boost to many businesses and consumers. The one issue that we do continue to worry about is possible disinflation, with still-weak demand keeping price growth at a minimum. Consumer prices have risen just 0.7 percent over the past year, for instance.

On the policy front, the Senate Finance Committee boasts a new chairman, as trade legislation from Trade Promotion Authority (TPA) to the Miscellaneous Tariff Bill (MTB) awaits action. Globally, Russia’s activities in Crimea and the Ukraine are prompting action by the Obama Administration and Congress, while trade talks in the Asia-Pacific and with Europe continue. Work has started on a bill to reauthorize the Export-Import (Ex-Im) Bank before the end of September. Manufacturers are also seeking input on which products should be covered by new international negotiations to eliminate tariffs on environmental goods.

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

chinese yuan - mar2014