China Agrees to End Export Subsidies in Win for U.S. Manufacturers and Global Trading Rules

By | Shopfloor Policy, Trade | No Comments

In a win for U.S. manufacturers, the Office of the U.S. Trade Representative (USTR) announced today a new bilateral agreement with China to dismantle a major government-funded export subsidy program that had boosted Chinese manufacturers at the expense of foreign companies. The new agreement eliminates more than 175 measures challenged by the United States in a February 2015 World Trade Organization (WTO) challenge and mandates follow-up consultation between the United States and China to ensure robust implementation of the agreement. Read More

Markit: China’s Manufacturing Sector Slowed Once More, Down to its Lowest Level Since March 2009

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The Caixin Flash China General Manufacturing PMI declined from 47.8 in July to 47.1 in August, its lowest level since March 2009. The Chinese manufacturing sector continues to struggle, with its PMI data contracting for the sixth consecutive month. Manufacturing activity was down across-the-board, including new orders (down from 47.2 to 46.3), output (down from 47.1 to 46.6), exports (down from 46.9 to 46.0) and employment (down from 47.2 to 46.0). The new orders figure was also at a post-recessionary low. Indeed, a number of economic statistics continue to reflect decelerating activity levels, particularly relative to the paces observed earlier in the year or last year. These include industrial production, fixed asset investments and retail sales. With that in mind, the Bank of China has devalued the yuan, down 2.9 percent in the past two weeks, and the Shanghai Composite Stock Market Index has plummeted more than 32 percent since June 12. Such sharp moves have prompted growth worries in financial markets around the world. Read More

Markit: Chinese Manufacturing Activity Slipped Further into Negative Territory in July

By | Economy | No Comments

The Caixin Flash China General Manufacturing PMI dropped from 49.4 in June to 48.2 in July, its lowest level since April 2014. Chinese manufacturing activity has now contracted in 7 of the past 8 months, continuing a deceleration trend in that nation’s economy. Indeed, all of the PMI subcomponents were in negative territory in July, with most of them slipping further. This included new orders (down from 50.3 to 48.1), output (down from 49.7 to 47.3) and exports (down from 50.3 to 46.6), with domestic and foreign demand declining once again after stabilizing slightly in June. Employment (up from 46.6 to 47.4) fell at a slower pace for the month, and yet, hiring has now decreased in 27 of the past 28 months. These data are consistent with recent economic indicators from China, which have reflected slower growth, particularly relative to the rates experienced at the end of last year or earlier. Read More

Monday Economic Report – June 29, 2015

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

Last week, there were several reminders that the manufacturing sector has not recovered fully from economic weaknesses earlier in the year, even as business leaders remain cautiously optimistic about activity in the coming months. Durable goods orders declined 1.8 percent in May, extending April’s 1.5 percent decrease. Much of this softness stemmed from reduced aircraft sales, with orders excluding transportation modestly higher. Nonetheless, durable goods demand has been quite weak for much of the past year. On the positive side, we would expect stronger durable goods orders in the June data, with the recent Paris Air Show lifting aircraft sales, and the broader measure, which excludes transportation, has edged marginally higher over the past three months. We hope that this is the start of a rebound. Read More

Markit: Eurozone Manufacturers Report Fastest Growth since April 2014

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The Markit Flash Eurozone Manufacturing PMI increased from 52.2 in May to 52.5 in June, its fastest pace of growth since April 2014. (The composite measure, which adds in services, rose to a 49-month high.) For manufacturers, output (up from 53.3 to 53.5) and employment (up from 51.6 to 52.0) both edged higher, with each expanding modestly. At the same time, there were slight easings for new orders (down from 52.7 to 52.5) and exports (down from 53.2 to 52.6). Nonetheless, the underlying story is a positive one, with Europe making significant progress in recent months and brushing off possible risks from Greece. With that said, robust growth continues to be elusive, with real GDP up 0.4 percent in the first quarter and industrial production up just 0.1 percent in April. On a year-over-year basis, the Eurozone grew 1.0 percent, with industrial output up 0.8 percent. Read More

Monday Economic Report – May 26, 2015

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

The minutes of the April 28–29 Federal Open Market Committee (FOMC) meeting highlighted the nuance that many of us see in the economy right now. The Federal Reserve highlighted a number of challenges facing consumers and businesses in the early months of 2015, noting how these headwinds have dampened overall activity year-to-date. On the other hand, the FOMC felt that slowing economic growth was largely due to “transitory factors,” with its outlook mostly unchanged for the rest of this year. The Federal Reserve projects growth of 2.3 to 2.7 percent in 2015, and it expects the unemployment rate to fall to 5.0 to 5.2 percent.   Read More

Manufacturers Call on Congress to Renew Nuclear Deal with China

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Last week, the President transmitted to Congress the renewal agreement for the “U.S.-China Agreement for Cooperation on the Peaceful Uses of Nuclear Energy,” also known as the U.S.-China Section 123 agreement. Unless the renewal is brought into force before the current agreement expires in December, U.S. nuclear suppliers will lose their access to the world’s largest market for commercial nuclear goods and services – effectively forfeiting billions of dollars in U.S. exports and thousands of American jobs in a key sector. The NAM recently joined several other associations in urging Congress to act on a clean and expeditious approval of the renewal U.S.-China Section 123 agreement.

Section 123 of the U.S. Atomic Energy Act requires a specific agreement for significant transfers of nuclear material, equipment, or components from the United States to another nation. This primer from the Congressional Research Service (CRS) provides additional background on these “123 Agreements”, and CRS also has this new report on the China Section 123 agreement. Read More

Monday Economic Report – April 27, 2015

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

Durable goods orders jumped 4.0 percent in March, which should be a sign that the sector was growing strongly and rebounding from recent softness. Instead, strong aircraft and motor vehicle sales in the month masked broader weaknesses behind the surface. Excluding transportation equipment orders, durable goods sales dropped 0.2 percent for the month and have edged lower across the past six months. Durable goods shipments were somewhat more encouraging on a year-over-year basis, up 3.7 percent, but they have been essentially flat since September. Read More

Markit: Slower Manufacturing Data in China, Europe and the U.S. in April

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Manufacturing activity in China contracted for the fourth time in the past five months, according to preliminary data from Markit. The HSBC Flash China Manufacturing PMI dropped from 49.6 in March to 49.2 in April, its lowest level in 12 months. The decline stemmed largely from reduced domestic demand, with the new orders index down from 49.3 to 49.2. The employment index (up from 47.4 to 48.0) has now reflected contracting levels of hiring for 20 straight months. On the positive side, new export orders (up from 49.0 to 50.6) shifted to a slight expansion in April, and output (down from 50.8 to 50.4) expanded ever-so slightly, albeit at a slower pace this month. Read More

Global Manufacturing Economic Update – April 17, 2015

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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