FED DIRECTORS SAY RECOVERY "PROGRESSING," BUT RISKS REMAIN
Bloomberg News"Directors at the Federal Reserve's 12 regional banks saw the US economic recovery 'progressing' while noting risks from inflation and slower growth, according to minutes of Board of Governors' meetings in April." Minutes from the board meeting, which were recently released, "show that most regional bank directors affirmed the view of Fed Chairman Ben S. Bernanke and the rate-setting Open Market Committee that record monetary stimulus remains appropriate to accelerate job creation and fuel economic growth." At the same time, "some directors expressed caution due to "considerable slack remaining in the economy and ongoing downside risks," including rising commodity prices and reductions in government spending, the minutes said."
WORKERS COMPENSATION FUND DECLARES $7.3 MILLION DIVIDEND
WCF
The Board of Directors for Workers Compensation Fund has declared a $7.3 million dividend to be distributed to a majority of policyholders this June. Policyholders can expect to receive 5 percent of their 2010 earned premium.
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(This is good news for UMA member companies participating in the WCF program with WCF where they already receive a 5% discount on their premium. Now they may receive another 5%; just one way UMA membership pays)
HOUSE TO CONSIDER BILL MANDATING REVIEW OF EPA RULES
The Hill
According the The Hill this morning, "The House will likely take up bipartisan legislation in the coming months that would mandate a new multi-agency review of how various Environmental Protection Agency (EPA) rules will affect the economy, employment and energy prices." Cleared by the House Energy and Commerce Committee panel yesterday, the bill "sets up a 'Committee for the Cumulative Analysis of Regulations that Impact Energy and Manufacturing in the United States,' which would be led by the Department of Commerce and include departments of Agriculture, Treasury, Labor and Energy, as well as the Small Business Administration, the Council of Economic Advisers and other departments," and Republicans are said to hope to bring the bill to the floor this summer. Rep. John Sullivan (R-OK), one of the bill's sponsors, said, "Simply put, the American people and this Congress deserve to know exactly how much these regulations are costing our economy."
According the The Hill this morning, "The House will likely take up bipartisan legislation in the coming months that would mandate a new multi-agency review of how various Environmental Protection Agency (EPA) rules will affect the economy, employment and energy prices." Cleared by the House Energy and Commerce Committee panel yesterday, the bill "sets up a 'Committee for the Cumulative Analysis of Regulations that Impact Energy and Manufacturing in the United States,' which would be led by the Department of Commerce and include departments of Agriculture, Treasury, Labor and Energy, as well as the Small Business Administration, the Council of Economic Advisers and other departments," and Republicans are said to hope to bring the bill to the floor this summer. Rep. John Sullivan (R-OK), one of the bill's sponsors, said, "Simply put, the American people and this Congress deserve to know exactly how much these regulations are costing our economy."
UMA SIGNS ON A LETTER TO SEN. MURKOWSKI ON RARE EARTH MINERALS
Tom Bingham-UMA President
This morning I signed on to a letter to Senator Murkowski urging Congress to find a permanent solution to the rare earth issue that impacts so many manufacturers.
The NAM is circulating a sign-on letter to Senator Lisa Murkowski detailing the policies which NAM believes are important to be included in a bill to provide for a comprehensive solution to the shortage of rare earth minerals.
Rare earth minerals are used in numerous manufacturing applications including but not limited to: renewable energy products, chemicals, catalysts for petroleum refining, defense applications, consumer electronics, wind turbines and hybrid car batteries. Over the past year demand for these minerals has continued to increase while the export of these minerals has dropped dramatically. This has created not only a shortage in these materials but in some cases there has been a significant increase in their price.
This morning I signed on to a letter to Senator Murkowski urging Congress to find a permanent solution to the rare earth issue that impacts so many manufacturers.
The NAM is circulating a sign-on letter to Senator Lisa Murkowski detailing the policies which NAM believes are important to be included in a bill to provide for a comprehensive solution to the shortage of rare earth minerals.
Rare earth minerals are used in numerous manufacturing applications including but not limited to: renewable energy products, chemicals, catalysts for petroleum refining, defense applications, consumer electronics, wind turbines and hybrid car batteries. Over the past year demand for these minerals has continued to increase while the export of these minerals has dropped dramatically. This has created not only a shortage in these materials but in some cases there has been a significant increase in their price.
Senator Murkowski introduced a draft bill for comments last month. Since, the NAM hosted Colin Hayes from Senator Murkowski’s office to speak to our Rare Earth Work Group regarding the draft bill. They have drafted a letter to Senator Murkowski detailing those policies which our membership believes are important to be included in a bill in order to provide for a comprehensive solution to the shortage of these minerals. The letter UMA signed on to is below.
May 26, 2011
Dear Senator Murkowski:
The undersigned associations thank you for your efforts to address the important issue of rare earth minerals as a subset of critical minerals. We greatly appreciate your leadership in this area and look forward to working closely with you over the next several months.
Rare earth minerals are used in numerous manufacturing applications including but not limited to: renewable energy products, chemicals, catalysts for petroleum refining, defense applications, consumer electronics, wind turbines and hybrid car batteries. Over the past year demand for some of these minerals has continued to increase while the export of several of these minerals has dropped dramatically. This has created not only a shortage in some of these materials but in some cases there has been a significant increase in the price of those minerals.
We realize that long term these shortages and price increases will create challenges to the manufacturing sector. We feel that it is important that we work with both the United States Congress and the Executive branch agencies to find a solution. There have been a number of bills introduced in the 112th Congress that address some aspect of the minerals issue. We are supportive of those efforts that examine and prioritize solutions in trying to address this issue. There are several provisions in these bills that help create a comprehensive solution. These include: re-opening of mines in the U.S. for responsible mining of these minerals; development of domestic processing capabilities; improvement of workforce; research and development for affordable alternative minerals; support for recycling and reuse of minerals. Most importantly, we believe that any comprehensive solution needs to address the problem in an expedited manner that is flexible enough to take into account the unique aspects of different industry sectors.
We thank you for your efforts and recognition of this important issue as this touches on various aspects of manufacturing. Our members depend on these minerals for manufacturing a number of products and for making their process efficient. We look forward to working with Colin Hayes on your staff on rare earths and critical minerals legislation.
Sincerely,
Dear Senator Murkowski:
The undersigned associations thank you for your efforts to address the important issue of rare earth minerals as a subset of critical minerals. We greatly appreciate your leadership in this area and look forward to working closely with you over the next several months.
Rare earth minerals are used in numerous manufacturing applications including but not limited to: renewable energy products, chemicals, catalysts for petroleum refining, defense applications, consumer electronics, wind turbines and hybrid car batteries. Over the past year demand for some of these minerals has continued to increase while the export of several of these minerals has dropped dramatically. This has created not only a shortage in some of these materials but in some cases there has been a significant increase in the price of those minerals.
We realize that long term these shortages and price increases will create challenges to the manufacturing sector. We feel that it is important that we work with both the United States Congress and the Executive branch agencies to find a solution. There have been a number of bills introduced in the 112th Congress that address some aspect of the minerals issue. We are supportive of those efforts that examine and prioritize solutions in trying to address this issue. There are several provisions in these bills that help create a comprehensive solution. These include: re-opening of mines in the U.S. for responsible mining of these minerals; development of domestic processing capabilities; improvement of workforce; research and development for affordable alternative minerals; support for recycling and reuse of minerals. Most importantly, we believe that any comprehensive solution needs to address the problem in an expedited manner that is flexible enough to take into account the unique aspects of different industry sectors.
We thank you for your efforts and recognition of this important issue as this touches on various aspects of manufacturing. Our members depend on these minerals for manufacturing a number of products and for making their process efficient. We look forward to working with Colin Hayes on your staff on rare earths and critical minerals legislation.
Sincerely,
Today in Manufacturing
Businesses cut orders for heavy machinery, computers, autos and airplanes, reducing demand for long-lasting goods by the largest amount in six months ... continue
Businesses cut orders for heavy machinery, computers, autos and airplanes, reducing demand for long-lasting goods by the largest amount in six months ... continue
Quick Manufacturing News
Forty percent of respondents to a survey by Capgemini say that demand volatility is their number one business driver, while 35% named increased material/service costs as their main business driver. Click to continue
Quick Manufacturing News
In an effort to improve its future rules, compliance assistance and outreach efforts, OSHA will survey thousands of employers this summer. Click to continue
NAM ShopFloor Blog
This morning, the Census Bureau released advanced data on durable goods orders for April, with new orders for manufactured durable goods falling 3.6 percent in the month. The largest declines were in transportation equipment (down 9.5 percent). Excluding transportation, new orders fell 1.5 percent. Durable goods shipments fell 1.0 percent. It is important to note that much of the decline was in sectors impacted by the Japanese disaster, as supply disruptions continue to affect production, particularly in the automotive sector. One bright spot was in computers and electronic products, with new orders up 0.7 percent and shipments up 3.5 percent for the month.
This morning, the Census Bureau released advanced data on durable goods orders for April, with new orders for manufactured durable goods falling 3.6 percent in the month. The largest declines were in transportation equipment (down 9.5 percent). Excluding transportation, new orders fell 1.5 percent. Durable goods shipments fell 1.0 percent. It is important to note that much of the decline was in sectors impacted by the Japanese disaster, as supply disruptions continue to affect production, particularly in the automotive sector. One bright spot was in computers and electronic products, with new orders up 0.7 percent and shipments up 3.5 percent for the month.
Unfilled orders and inventories both rose for the month, by 0.2 percent and 0.9 percent, respectively. Both have risen each month for over one year, reaching new highs. The largest increases in unfilled orders were in machinery (up 2.2 percent), other durable goods (up 1.5 percent), and capital goods excluding aircraft (up 0.9 percent). With continued growth in unfilled orders, these sectors should continue growing despite the cooled figures for new orders.
This news comes on the heels of yesterday’s manufacturing survey for April from the Richmond Federal Reserve, which also showed weakness in new orders and shipments. Its index of current activity fell from 10 to -6, a decline that was unexpected by many analysts. Despite the negative number, its overall conclusions are quite similar to the surveys released by the New York and Philadelphia Federal Reserve Banks last week.
Two interesting points from this survey: First, it found that raw material prices averaged an annualized increase of 6.12 percent in April, building off of the 4.81 percent increase in March. This continues to highlight the pricing pressures that many manufacturers are facing right now. The second piece of news is that despite the cooling that we are seeing, manufacturers continue to hire. The manufacturing employment index in the Richmond survey remained steady at 14. Moreover, the respondents said that they were “generally upbeat” about the next six months – a good sign.
Putting all of this in perspective, Mark Doms, the chief economist for the U.S. Department of Commerce, yesterday wrote favorably about the boost that manufacturing is giving the economic recovery. While he wrote that post prior to today’s durable goods numbers, it does reflect the overall trend that we have seen in the past few months. He goes into great detail about durable goods orders and trade and writes that “there is good reason to be happy about the prospects for the manufacturing sector, particularly given the role exports are playing in boosting the industry.”
Carter Wood – NAM ShopFloor Blog
The House Judiciary Subcommittee on the Constitution held a hearing Tuesday, “ Can We Sue Our Way to Prosperity?: Litigation’s Effect on America’s Global Competitiveness.” The testimony by Paul J. Hinton, vice president of NERA Economic Consulting, proved the answer to be, “No. No we cannot sue our way to prosperity. But we can sue ourselves into a global competitive disadvantage.”
The House Judiciary Subcommittee on the Constitution held a hearing Tuesday, “ Can We Sue Our Way to Prosperity?: Litigation’s Effect on America’s Global Competitiveness.” The testimony by Paul J. Hinton, vice president of NERA Economic Consulting, proved the answer to be, “No. No we cannot sue our way to prosperity. But we can sue ourselves into a global competitive disadvantage.”
From Hinton’s prepared statement:
One NERA study I directed on Tort Liability Costs for Small Businesses shows that tort costs are not borne evenly throughout the economy. Small businesses bear a relatively larger share of tort costs than larger businesses. For example, businesses with less than $10 million in revenues in 2008 represented
Paul Hinton
only 22 percent of U.S. business revenues but incurred 83 percent of tort costs. This is economically important because small businesses generate the majority of net new jobs, 65 percent over the past 17 years.The costs of the U.S. tort system may have effects on businesses similar to an implicit tax. The economic literature on the effects of taxes on business activity is instructive in identifying the effects of higher costs of business on economic development. This literature as well as surveys of business attitudes describe how business decisions on where to make investments and add jobs are sensitive to local costs of doing business. Tort liability costs may also affect the growth of existing businesses within the 50 states.
One NERA study I directed on Tort Liability Costs for Small Businesses shows that tort costs are not borne evenly throughout the economy. Small businesses bear a relatively larger share of tort costs than larger businesses. For example, businesses with less than $10 million in revenues in 2008 represented
Paul Hinton
only 22 percent of U.S. business revenues but incurred 83 percent of tort costs. This is economically important because small businesses generate the majority of net new jobs, 65 percent over the past 17 years.The costs of the U.S. tort system may have effects on businesses similar to an implicit tax. The economic literature on the effects of taxes on business activity is instructive in identifying the effects of higher costs of business on economic development. This literature as well as surveys of business attitudes describe how business decisions on where to make investments and add jobs are sensitive to local costs of doing business. Tort liability costs may also affect the growth of existing businesses within the 50 states.
In another NERA study, I worked with colleagues to examine how relatively higher tort costs in the U.S. affect international competitiveness. We compared the growth of productivity in the manufacturing industries affected by asbestos litigation in the U.S. since the late 1980s to productivity growth of the same industries in other industrialized countries. We found that productivity growth in the U.S. industries affected by asbestos litigation was 0.5 percent per year slower than their counterparts in other countries. Over the period of study from 1987 to 2000, the lower U.S. productivity growth amounted to lost GDP of over $300bn, with $51bn of that loss realized in 2000. (continue reading…)
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