Following generally positive news the prior two weeks, last week's reports were a mixed bag. Of the eight major economic indicators, five showed improvement (including two reports of inflation and three reports of economic activity) while three deteriorated.
The most important positive report last week was the Federal Reserve's estimate of November industrial production, which showed that manufacturing activity expanded by 1.1 percent last month. While this was the fastest pace in three months, the fact that a majority (15 of 19) of the major manufacturing industries posted production gains in November was also a welcome sign. Still, a majority of manufacturing industries have experienced growth in just three of the past six months (July, August and November), which shows the recovery is not yet running on all cylinders.
According to chart above, which shows manufacturing production, manufacturing has a long way to go to recover from the deepest and longest downturn since the Great Depression. Manufacturing production peaked in December 2007. Over the course of the next 18 months, factory output fell by close to 17 percent and bottomed out this past June. While nearly a quarter of the decline in output has been recovered so far, the current level of manufacturing production is still only equal to that of May 2002. Moreover, with more than a third (37 percent) of the upturn in manufacturing output since June being driven solely by motor vehicle output in response to the now-expired "Cash of Clunkers" program, a general industrial recovery is still just getting underway.
The other positive news that came out last week showed that construction activity (housing starts and building permits) increased in November. This increase followed significant declines in recent months and by itself does not signal that a recovery in the housing market is accelerating. In fact, last week's December report by the National Association of Home Builders (NAHB) showed that the general housing market deteriorated in the last month of 2009 for the second time in three months.
After peaking in June 2005, the NAHB housing market index first dipped below the growth threshold level of 50 in May 2006 and then bottomed out at a level of 8 in January 2009. After improving to a level of 19 in September, the index fell back to a six-month low of 16 in December. Collectively, last weeks reports on the housing front signal that residential investment will likely slow in the fourth quarter following the 19.5-percent growth (annual rate) attained in the third quarter.
Note: The Monday Economic Report will be on holiday next week. The next report will usher in the New Year on Monday, January 4, 2010.
Dave Huether
Chief Economist
National Association of Manufacturers
December 23, 2009—FLAG Communications Weekly
Senate Majority Leader Harry Reid’s manager’s amendment to the Senate health care bill, available here as a .pdf file, proposes actual statutory language for federal grants to states to establish demonstration projects on medical liability. The provisions run from page 344 to 359: "SEC. 399V-4. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT LITIGATION." The previous versions of the bill had simple "Sense of the Senate" language that only suggested federal support for demonstration projects. The new amendment is much more detailed and authorizes $50 million over five years, beginning in Fiscal Year 2011 (Page 358). Many provisions would favor participation in the demonstrations by the plaintiffs' bar, including the targeting of medical errors, which is the gist of AAJ's latest arguments against medical liability reform. At Overlawyered.com, Walter Olson reports a Capitol Hill source’s insightful analysis of the language, which concludes: “Sen. Reid’s bill spends 50-million taxpayer dollars on a grant program run by trial lawyers for the benefit of trial lawyers. The money will be spent to establish “alternatives to litigation” that are even more lucrative for trial lawyers and costly for doctors than the current broken system.”
COORDINATION CRITICAL TO MEETING WEST'S FUTURE ELECTRICITY NEEDS
December 23, 2009 – UAE Weekly Energy Brief
San Diego -- Western governors and a diverse group of panelists meeting here today focused on what the West's future electricity portfolio should look like, what it will take to get there and how long it will take.
The Western Governors' Association wrapped up its winter meeting with plenary sessions focused on creating a path for new transmission and the West's overall energy future.
"The recession has slowed the growth in demand for electricity, but we cannot squander this opportunity to address future needs," said Gov. C.L. "Butch" Otter (Idaho), WGA's Vice Chairman. "It is clear that coordination among states, the federal government, all segments of the industry and non-governmental organizations is essential for the region to meet its clean energy needs."
The governors have long maintained that the West can expand energy and transmission development while protecting lands, wildlife and natural resources. Gov. Brian Schweitzer (Mont.), WGA's Chairman, said it is imperative that federal agencies work with states to expedite construction of new transmission and make sure that renewable resources are being appropriately developed on federal lands.
"Western governors recognize that we do not have time to waste, and we are prepared to move ahead with needed transmission development," Schweitzer said. "We look forward to partnering with the federal government in making it happen."
Plenary sessions over the two-day meeting highlighted some of the most difficult issues that must be addressed in developing an energy portfolio that is clean, diverse, reliable and reasonably priced. They include:
- impacts of drought and climate change on electricity generation and transmission systems
- changes in demand for electricity due to increased numbers of plug-in electric vehicles; and
- barriers to building new transmission, especially high voltage, long-distance transmission that will open up many of the geographically isolated renewable energy areas.
Governors attending this year's meeting were Brian Schweitzer (Mont.), WGA Chairman; C.L. "Butch" Otter (Idaho), Vice Chairman; Felix Camacho (Guam); Jim Gibbons (Nev.); Bill Richardson (N.M.); Ted Kulongoski (Ore.); Gary Herbert (Utah); and Dave Freudenthal (Wyo.).
MANUFACTURING U
December 21, 2009 -- By Trina Cobbley
Dixie Applied Technology College (DXATC) and Dixie State College (DSC) have initiated a new educational partnership with Viracon, a St. George glass fabrication company, Blue Bunny, a St. George ice cream manufacturing company, CabineTec, a St. George semi-custom cabinetry manufacturer and Stampin’ Up!, a Kanab decorative stamp manufacturer. The partnership will assist current employees to achieve certifications, associate degrees and bachelor degrees in manufacturing processes and leadership.
The new program, “Manufacturing U” began on January 13, 2009 with a cohort of 24 students selected by the four manufacturers, DXATC and DSC.
16 Viracon employees and eight additional employees from the other three companies attend the program. Coursework over the next two years will focus on manufacturing processes, industrial maintenance, quality production, safety, leadership, human relationships and mathematics.
Note: this program has been expanded to the South West Applied Technology College in Cedar City and will be picked up by the new Tooele Applied Technology College in 2010.
Utah Innovation Awards 2010
Save the date to submit your nomination to the eighth annual Utah Innovation Awards, presented by Stoel Rives LLP and the Utah Technology Council. The program recognizes Utah’s best innovations and the companies that created them. Nominations are due February 10, 2010 and can be submitted online by clicking here.
Innovations from all industries and in all areas of technology will be considered including the following:
Biotechnology/Pharmaceuticals
Computer Hardware/Electrical Devices
Clean Technology and Energy
Consumer Software and Web Services
Enterprise Software and Web-Enabled B2B Solutions
Mechanical Systems/Chemicals/Manufacturing
Medical Devices
Outdoor and Consumer Products
Other
Up to two finalists and one winner will be selected from each category. The entries are judged by a Selection Committee comprised of approximately 70 representatives from private industry, government and higher education, many of whom are experts in the areas of technology represented. Award winners will be announced at an Awards Luncheon in April.
The awards program is sponsored by Utah Business Magazine and supported by the Association of Corporate Growth, FundingUniverse.com, USTAR, Utah Manufacturers Association, Utah Manufacturing Extension Partnership and the Wayne Brown Institute.
Program Contacts:
Nicole Kershaw - Business Development Manager - Stoel Rives LLP -
(801) 715-6657 nkershaw@stoel.com
Jenn Oblad - Business Development Coordinator - Stoel Rives LLP -
(801) 715-6662 joblad@stoel.com
ACG Utah 2010 Growth Conference - March 12, 2010
2010 will be pivotal for small- to medium-sized companies -- a transitional year for growth, acquisition, expansion and more -- a time to capitalize on opportunities and gain competitive advantages in the new economy. As such, the ACG Utah Growth Conference will provide executives with an unsurpassed breadth and depth of information, contacts and context to help them successfully transition their companies through 2010 and beyond.
The ACG Utah 2010 Growth Conference is a rare opportunity for business owners, executives, development officers, intermediaries and service providers in Utah to network, to learn about how to maximize growth opportunities and to meet with the principals of over 40 Utah-focused private equity groups and mezzanine lenders representing billions of dollars of growth and buyout capital.
Save the date today for the March 12, 2010, ACG Utah 2010 Growth Conference and Capital Connection. You won't want to miss out!
The ACG Utah 2010 Growth Conference and Capital Connection will be held at the Grand America Hotel in Salt Lake City on March 12, 2010. Register today or find more information by visiting our website at www.acgutah.org, or contacting ACG Utah at 801.359.8613.
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THE CORRIDORS OF POWER
December 23, 2009 – FLAG Communications Weekly
The National Association of Manufacturers (NAM) and other major energy and business trade associations are seeking to intervene on the side of the Department of Interior, defending a lawsuit brought by 15 environmental groups against the agency’s expedited siting of transmission lines under the Energy Policy Act of 2005. Led by the Wilderness Society, the environmentalists sued in U.S. District Court, Northern District of California, to stop the designation of energy corridors in the western United States, specifically the West-wide Energy Corridors. According to the complaint (here), they are suing under the National Environmental Policy Act (NEPA) and four other federal statutes. (The groups had previously challenged the Department of Energy’s designation of corridors through the administrative process.) On Dec. 17, the NAM filed a motion to intervene as an intervener/defendant in the litigation, joined by the Edison Electric Institute, American Public Power Association, National Rural Electric Cooperative Association, American Gas Association, and U.S. Chamber of Commerce. The motion is here, and the NAM’s statement of interest begins on page 20:
The NAM endorsed the EPAct, which includes many provisions necessary to expedite development of a modernized electricity grid to meet increased demand. Furthermore, the NAM endorses policies that will expedite development of a “smart grid,” which will save manufacturers money. A modern grid will give manufacturers options when it comes to the amount and type of power they use, and when to use those energy resources. It will allow power providers, including NAM members, the tools to better manage energy demand with available resources. The siting, construction, and continued operation of existing and new electric facilities frequently require federal land use authorizations, which § 368 is meant to facilitate. The NAM supports the identification and designation of corridors across federal lands under that section. Plaintiffs’ lawsuit threatens these interests by seeking to block implementation of and impose additional delays and regulatory constraints on the WWEC, which otherwise would facilitate development of a modern energy grid in the 11 Western states. McCoy Decl. 7-9.
· News release, the Wilderness Society, July 7, “Coal-Friendly Bush Energy Corridor Plan Challenged”
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