exports Archives - Shopfloor

ISM: Manufacturing Activity Remained Robust in October but Pulled Back from September’s 13-Year High

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Institute for Supply Management (ISM) said that manufacturing activity expanded robustly in October, even as it pulled back from September’s reading, which was the fastest pace since May 2004. The ISM Manufacturing Purchasing Managers’ Index (PMI) decreased from 60.8 in September to 58.7 in October. The sample comments suggest that negative impacts from recent hurricanes explain at least part of October’s weaker reading. Nonetheless, the larger story remains one of strength, with business activity continuing to grow at healthy rates. For instance, indices for new orders (down from 64.6 to 63.4) and production (down from 62.2 to 61.0) exceeded 60—a threshold which would signify a vigorous expansion in demand and output in the sector—for the fifth consecutive month. Read More

As World Trade Month Begins, Could We Agree to Start on the Same Page?

By | Shopfloor Main, Shopfloor Policy, Trade | No Comments

Trade and manufacturing continues to be bandied about in interviews with presidential and other candidates, achieving a level of national attention that it deserves given the importance of trade to manufacturing. Unfortunately, most of the conversations are totally removed from the reality of manufacturing in America today and both the challenges and opportunities it provides to businesses, small and large, and the American workforce.

As we begin World Trade Month, lets all start on the same page:

Manufacturing Output Is at Record Levels.
In the most recent data, manufacturers contributed $2.17 trillion to the U.S. economy. This figure has risen since the second quarter of 2009, when manufacturers contributed $1.70 trillion.

 Trade Growth Has Quadrupled Over the Past Quarter Century, as Has Manufacturing Output (See Chart Below).
mfgtrade blog

Free Trade Agreements, Such as NAFTA and Those with 18 Other Countries, Have Been Vital to Grow Manufacturing in America

Manufacturers in America sell 12 times more to our 20 free trade agreement (FTA) partners than to the rest of the world, even though they represent only 6 percent of the world’s consumers. The United States has a trade surplus overall with its FTA partners if that’s how you want to judge the relationship.

Exports FTA
MFG Trade Balance


Manufacturing in America Will Lose to Foreign Competitors if the United States Does Not Move Forward Aggressively with New Trade Agreements, Such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) Agreement.

Other countries are more aggressively negotiating trade agreements that exclude and hurt the United States, meaning U.S. exporters face higher tariffs than most other countries in the world:

Tariffs Faced By Ranking Countries

A robust U.S. trade policy to grow manufacturing in America must open foreign markets, ensure strong trade enforcement and improve U.S. manufacturing competitiveness in the face of substantial global competition. Click here to learn more.

ISM: Manufacturing Activity Expanded for Second Straight Month, Slowing a Little in April

By | Economy, General, Shopfloor Economics | No Comments

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

Markit: U.S. Manufacturing Activity Grew at the Slowest Pace since September 2009

By | Economy, Shopfloor Economics | No Comments

U.S. manufacturing activity grew at the slowest pace since September 2009, according to preliminary figures from Markit. The Markit Flash U.S. Manufacturing PMI decreased from 51.5 in March to 50.8 in April. In general, the strong dollar and weaknesses abroad have dampened international demand and overall sentiment over the course of the past year. Manufacturing activity has decelerated significantly over the past 12 months, with the main PMI number down from 54.2 in April 2015. In this report, output (down from 51.4 to 50.3) and hiring (down from 52.1 to 50.2) each pulled back to a near-standstill, with exports (down from 50.0 to 48.5) contracting for the second time in the past three months. On the other hand, new orders (down from 52.8 to 52.0) continued to expand modestly, but with some easing for the month.

As such, this report stands in sharp contrast to the better-than-expected sentiment seen in the competing data from the Institute for Supply Management (ISM). In that release, new orders and output each grew surprisingly strong in March, lifting its manufacturing PMI value above 50 for the first time since August. It provided some encouragement after months of softness, even as other economic data – including this one from Markit – continue to suggest ongoing challenges. Read More

Markit: U.S. Manufacturing Activity Remained “Subdued” Despite Picking up a Little in March

By | Economy, Shopfloor Economics | No Comments

U.S. manufacturing activity remained “subdued” despite picking up a little in March, according to the latest figures from Markit. The Markit Flash U.S. Manufacturing PMI increased from 51.3 in February, its slowest pace in more than three years, to 51.4 in March. This suggests that manufacturing in the U.S. remains challenged despite some signs of progress, including accelerated growth for new orders (up from 51.7 to 52.8), output (up from 51.3 to 51.4) and hiring (up from 51.5 to 52.1). The pickup in demand is notable, even as the sales expanded at a much faster pace at this point last year, when the index for new orders stood at 56.4. On the other hand, exports (up from 49.1 to 50.0) were stagnant in March, stabilizing a bit after contracting in February. In general, the strong dollar and weaknesses abroad have dampened international demand and overall sentiment over the course of the past year, with the export index averaging 50.2 over the past 15 months. Read More

New Onerous Requirement for Shippers Coming Online This Summer

By | Shopfloor Policy, Trade, Transportation | No Comments

A new International Maritime Organization (IMO) rule requiring shippers to physically weigh containers and their contents before being loaded at the port of origin is expected to come into effect on July 1, 2016. This amendment to the long-standing International Convention for the Safety of Life at Sea (SOLAS) treaty places an additional burden on shippers (both exporters and importers) to obtain and certify the Verified Gross Mass (VGM), or combined weight of cargo and the container. The United States Coast Guard (USCG) is the responsible agency for overseeing and enforcing this new requirement, and it will be implemented around the world by the other 161 signatories to the treaty.

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ISM: Manufacturing Contracted for the 5th Straight Month, but Offered Some Encouraging Signs

By | General, Shopfloor Economics | No Comments

The Institute for Supply Management (ISM) said that manufacturing activity has now contracted for five straight months. The manufacturing purchasing managers’ index increased from 48.2 in January to 49.5 in February but remained below the important threshold of 50 which would indicate the start of expansion. In that regard, this report continued to show weaker-than-desired data for manufacturers, with the sector challenged by global headwinds and reduced commodity prices. Indeed, exports (down from 47.0 to 46.5) remained in contraction territory, hurt by the strong dollar and economic softness for manufacturing goods to key markets.

Yet, this latest release also offered some signs of encouragement. For one thing, the headline index was higher than the consensus expectation of roughly 48.5, indicating that respondents were perhaps less downbeat than predicted. At the same time, some of the underlying data reflect stabilization  in activity from prior months. For instance, new orders (unchanged at 51.5) and production (up from 50.2 to 52.8) have now expanded for two consecutive months, with the latter growing at its fastest pace since August. Moreover, the pace of decline for hiring (up from 45.9 to 48.5) slowed in February, and pricing pressures (up from 33.5 to 38.5) remain virtually nonexistent.

This does not mean that manufacturing’s struggles are over, but this report does offer a glimpse of cautious optimism, with the ISM data coming in a bit stronger than anticipated. Even with this finding, manufacturers remain anxious in their economic outlook overall, and other reports continue to highlight softness in the marketplace. With that in mind, manufacturing leaders remain focused on implementing pro-manufacturing policies, including those outlined in the NAM’s “Competing to Win” document in this all-important election year and beyond.

Kansas City Fed: Manufacturing Activity Has Declined for 12 Straight Months

By | Economy, Shopfloor Economics | No Comments

The Kansas City Federal Reserve Bank said that manufacturing activity in its district has declined for 12 straight months. The composite index of general business conditions fell from -9 in January to -12 in February, its lowest level since April 2009. Reduced crude oil prices, the strong dollar and weaknesses abroad have pressured the sector’s performance. The data were negative across-the-board, including new orders (up from -27 to -15), production (unchanged at -8), shipments (down from -7 to -11), exports (down from 1 to -6), employment (down from -7 to -20) and the average employee workweek (down from -7 to -14). Half of all respondents said that they experienced no change in new orders for the month, with 30 percent noting declining sales. As such, it should not be a surprise that manufacturers in the region remained anxious.

With that said, manufacturing leaders in the Kansas City Fed area were cautiously positive in their outlook for the next six months, but not overwhelmingly so. The forward-looking composite index edged down from 5 to 4. At the same time, new orders (up from 13 to 15), production (up from 14 to 16) and shipments (up from 18 to 20) are expected to increase at decent rates in the months ahead, which should provide some encouragement. Yet, other indicators reflect ongoing softness in the market. For instance, the labor market is anticipated to remain weak, including hiring (down from 5 to 3) and the average workweek (up from -8 to 1), and capital spending is seen declining (down from -1 to -9). Exports (down from 2 to -1) are also predicted to be slightly negative over the next six months.