Commerce Department Archives - Shopfloor

Timmons: Wilbur Ross Will Bring Unique Understanding of Manufacturing to Commerce

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Former NAM Member Knows Challenges Manufacturers Face

National Association of Manufacturers (NAM) President and CEO Jay Timmons released the following statement after the nomination of Wilbur Ross to serve as secretary of commerce:

“Wilbur Ross will bring a unique understanding of what it takes to fuel manufacturing enterprises into this vital role. As one of the savviest investors in the world who was once a member of the NAM while leading International Steel Group, Mr. Ross has a firsthand understanding of the challenges manufacturers face to remain globally competitive in today’s economy.

“To raise wages, put more people to work and out-innovate the rest of the world, manufacturers in America need fairer taxes and sane regulations as well as expanded trade and strong trade enforcement. We’re encouraged by Mr. Ross’ advocacy on many of these fronts and his extensive business experience. We look forward to working closely with him and the Trump administration to make manufacturing in our country stronger.”

CONTACT: Jennifer Drogus (202) 637-3090

President Obama Announces Plan to Reorganize Trade Agencies

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Today we heard from President Obama about his plan to reorganize several federal agencies – many of which are critical to manufacturers and their ability to create and retain jobs.

Changes would include combining the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency into a single department in an effort to improve government efficiency and to help promote business. The key question in reviewing this proposal is will it help manufacturers compete, export, invest and create jobs?

Any changes that are considered must focus on improving intellectual property protection, opening markets for exports, improving market access, and more. Additionally, while manufacturers have done well in leaning their processes to improve their competitiveness and would vigorously support the federal government doing the same in this difficult debt and deficit environment, the agencies affected must continue to have the necessary resources to meet their missions.

If the streamlining and efficiency undertaken in this proposed combination of agencies will mean that manufacturers will have less intellectual property protection, for example, it would be a devastating mistake. If, on the other hand, this leaning process will mean doing more with less, it would be a great step forward.

As policymakers respond to the President’s proposals today, we are hopeful that the discussion centers on the key question for manufacturers – will they be better able to compete, export, invest and create jobs as a result? With a 20 percent cost disadvantage already, manufacturers will deeply care about the impact these proposals will have on their ability to compete.

Aric Newhouse is senior vice president for policy and government relations, National Association of Manufacturers.

Circumnetting the Mixed Global Economic News, Commentary

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Mixed in the sense of could be better.

Reuters, “Fourth-quarter growth revised down to 2.8 percent“:

WASHINGTON (Reuters) – The economy grew slower than initially estimated in the fourth quarter as government investment contracted more sharply and consumer spending was less robust, a government report showed on Friday. Gross domestic product growth was revised down to an annualized rate of 2.8 percent, the Commerce Department said in its second estimate, from 3.2 percent. Economists had expected GDP growth, which measures total goods and services output within U.S. borders, to be revised up to a 3.3 percent pace.

The Commerce Department report is here.

Bloomberg, “Britain’s Economy Contracts More Than Estimated as BOE Divides on Remedies“: Read More

Circumnetting the Economy and Politics

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Peoria Journal-Star, Caterpillar finds Victoria, Texas, ‘ideal’“: “PEORIA —Caterpillar Inc. will build its new hydraulic excavator plant in Victoria, Texas, the company announced Thursday. Caterpillar will create more than 500 new jobs at the plant, on which construction will begin next month with completion expected by mid-2012. The plant will triple the company’s existing capacity of hydraulic excavator production in the United States.”

CNBC, July 13, “CNBC’s Top States For Business 2010—And The Winner Is Texas“: “Texas powers past the tough times on the strength of its economy—top-ranked in our Economy category four years in a row. The Texas economy is the 15th largest in the world, according to government figures; larger, for example, than all the Scandinavian nations combined.”

Jack Stewart, California Manufacturers and Technology Association, Employment debate focuses on creaky wheels of industry Factory jobs critical to growth”: “Since the latest budget revision was signed late last month, there has been a loud chorus decrying the compromise struck between Gov. Arnold Schwarzenegger and the Legislature because it contained no new taxes on business. The leaders of this ‘tax business’ chorus have submitted an initiative aimed at repealing business tax reforms enacted in February that were meant to level the playing field for California employers. Raising taxes on business, however, is no way to help the state’s economy or its manufacturing base.”

Bloomberg,US Retail Sales Rise Less Than Economists Estimated“: Sales at U.S. retailers rose less than forecast in July, indicating a lack of jobs is prompting Americans to hold back on spending. The 0.4 percent increase, led by autos and gasoline, followed a revised 0.3 percent drop in June, figures from the Commerce Department in Washington showed today.”

Investor’s Business Daily editorial,The Cabinet From Another World: “There’s never been an administration led by so few people with any experience in the private sector — including the president, the vice president and even the treasury secretary, who last week wrongly called it a ‘myth’ that raising taxes on high-income Americans would hurt small business.”

Commerce.gov news release, July 15,Hightower to Step Down as Deputy Commerce Secretary“: “Deputy Commerce Secretary Dennis F. Hightower announced today that he plans to step down effective August 27. He’ll be returning to the private sector to resume his work on corporate governance and training and developing the next generation of global business leaders. At Commerce, Hightower brought skills he learned at the top levels of the business world to help shepherd some of Commerce’s most complicated initiatives, including satellite acquisition, cybersecurity and the Recovery Act’s Broadband Technology Opportunities Program.”

Durable Goods: Up, Up and Away! At Least for Aircraft

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While today’s report from the Commerce Department shows that orders to U.S. factories for big-ticket manufactured goods rose a brisk 2.9 percent in April, this increase was fueled largely by commercial aircraft orders, which soared 228 percent last month and are extremely volatile from month to month due to the large dollar volume of transactions. Outside of non-defense aircraft, new orders actually fell by 1 percent in April, the second decline in the past three months. This decline was driven by either outright declines in orders in areas such as machinery, primary metals and electrical equipment or more moderate increases in areas such as computers and electronics and fabricated metals.

Outside of aircraft, the bulk (88 percent) of the decline in new durable orders last month was caused by a 5.9 percent drop in machinery, which in turn is a major purchaser of both primary and fabricated metal products. Given the fact that 41 percent of machinery manufactured in the United States is exported — and more than a fifth of that is sent to Europe –we will be watching to see if today’s report could be the first spillover effect of the European debt crisis into the U.S. economy.

With the positive effects from the recently expired homebuyer tax credit likely to diminish in the months ahead, more economic growth will have to come from other areas including business investment, consumer spending and exports if the manufacturing recovery is to maintain its current trajectory. And while today’s report is not alarmingly negative, it does suggest that the manufacturing recovery may be slowing from the brisk pace of the past three quarters. However, due to the monthly volatility of most durable goods orders, several more months of data will be required to ascertain if a sustained slowdown is in the making.