Posts for March 15, 2010

As opposed to the mixed bag last week, this week's economic report brings generally positive news. Three of the five major economic indicators that came out last week improved. Most surprising was the solid increase in retail sales last month. Given the severe winter weather as well as ongoing troubles in the auto sector, a slight decline was anticipated. (To see all of last week's indicators, see the Latest Economic Reports section below.)

Earlier this month, the Commerce Department released a new report on jobs supported by manufacturing exports in 2008. The report is available at www.census.gov/mcd/exports/

Prior reports cover the following years: 2006, 2005, 2003 and 2002.

An analysis of the 2003-2008 period shows that manufacturing export growth had a significant positive impact not only on manufacturing but on other sectors as well.

• From 2003 to 2008, total U.S. manufactured shipments rose 37 percent.
  
• Exports and export-supported shipments rose 70 percent.
  
• Other manufacturing shipments rose 30 percent.
  
• The increase in export-related activity accounted for one-third of the rise in manufacturing shipments between 2003 and 2008.
  
• As a result, the share of export-related activity rose from 17 percent to 22 percent of overall manufactured shipments -- a 25-percent increase in just 5 years.
  

Rising exports not only support manufacturing jobs, but jobs in other sectors as well.
In 2003, manufactured exports supported a total of 5 million jobs, roughly half (2.4 million) in manufacturing and half (2.6 million) in other sectors, like business services, transportation, wholesale trade and agriculture.

By 2008, manufactured exports supported close to 7 million jobs (6.8 million), a 34-percent increase in just 5 years (see chart above).

While exports created 446,000 new manufacturing jobs, three-quarters of the new jobs created by the rise in manufactured exports (1.3 million) were in sectors outside of manufacturing. This increase in employment from manufactured exports accounted for 28 percent of the 4.7 million increase in private sector employment (outside of manufacturing) during this time.

When these data are further analyzed, they will be incorporated into the state trade data pages on the NAM web site, located at State-Trade-Data

Dave Huether

Chief Economist

National Association of Manufacturers


20 GOVERNORS URGE REID, PELOSI TO BLOCK EPA REGULATION OF CARBON EMISSIONS

By Kathleen Hart

Governors of 18 states and the territories of Guam and Puerto Rico wrote a letter to Senate and House leaders March 10 urging them to stop "harmful" regulation of greenhouse gas emissions by the U.S. Environmental Protection Agency.

The governors said that they "are gravely concerned" about efforts initiated by the EPA to "impose greenhouse gas regulations that could be harmful to our economies at an especially critical time."

The letter to Senate Majority Leader Harry Reid, D-Nev.; Senate Minority Leader Mitch McConnell, R-Ky.; Speaker of the House Nancy Pelosi, D-Calif.; and House Minority Leader John Boehner, R-Ohio, called for congressional legislation aimed at stopping EPA regulations, rather than simply delaying them.

Arguing that the EPA is not equipped to consider the potential for economic harm in regulating emissions, the governors said that "a simple delay of EPA action will do nothing to provide relief to Americans looking for jobs or businesses looking to make new investments in our states. Furthermore, such delay of EPA action only creates more uncertainty in a difficult fiscal environment."

The governors said that policies aimed at the nation's emissions of carbon dioxide and other greenhouse gases should be developed by elected representatives at the state and national level and not by a single federal agency. "We feel compelled to guard against a regulatory approach that would increase the cost of electricity and gasoline prices, manufactured products, and ultimately harm the competitiveness of the U.S. economy," the letter said. "As governors, we strongly urge Congress to stop harmful EPA regulation of greenhouse gas emissions that could damage those vital interests."

Sen. Jay Rockefeller, D-W.Va., introduced legislation in the U.S. Senate March 4 that would suspend the EPA's potential regulation of carbon dioxide emissions from coal-fired plants for two years. Rep. Nick Rahall, D-W.Va., introduced a companion bill in the House of Representatives.

EPA Administrator Lisa Jackson has outlined a timetable for potential agency regulation of greenhouse gas emissions from stationary sources. Sen. Lisa Murkowski, R-Alaska, ranking Republican on the Senate Energy and Natural Resources Committee, sent a letter to Jackson March 5, demanding detailed answers as to how the agency intends to regulate emissions of CO2 from power plants and other smaller stationary sources.

Murkowski and 40 co-sponsors introduced a disapproval resolution in the Senate in January that would prohibit the EPA from regulating greenhouse gas emissions under the Clean Air Act.

Mississippi Gov. Haley Barbour signed the letter along with Govs. Bob Riley of Alabama; Sean Parnell of Alaska; Jan Brewer of Arizona; Sony Perdue of Georgia; Felix Camacho of Guam; Linda Lingle of Hawaii; Steven Beshear of Kentucky; Bobby Jindal of Louisiana; Tim Pawlenty of Minnesota; Dave Heineman of Nebraska; Jim Gibbons of Nevada; John Hoeven of North Dakota; Luis Fortuno of Puerto Rico; Donald Carcieri of Rhode Island; Mark Sanford of South Carolina; M. Michael Rounds of South Dakota; Gary Herbert of Utah; Robert McDonnell of Virginia; and Joe Manchin III of West Virginia.

EPA CHIEF DECRIES 'MISCONCEPTION' THAT CARBON RULES WILL HARM ECONOMY
By Kathleen Hart

In a speech at the National Press Club in Washington, D.C., March 8, EPA Administrator Lisa Jackson argued against what she called the widespread "misconception" in the United States that the nation must choose between reducing its greenhouse gas emissions and growing the economy.

"Many of us believe, sadly, that we must choose between our economy and our environment," Jackson said. Environmental advocates have "lost the messaging war" because "the choice between the environment and the economy is indeed a false choice," she added.

Time and again, regulations aimed at protecting the environment have led the private sector to innovate and have spurred economic growth, Jackson said. She pointed to experiences in recent decades with environmental regulations aimed at eliminating the use of the chlorofluorocarbons that were causing a hole in the ozone layer and rules designed to remove lead from the nation's air.

As the administration of President Barack Obama continues "to face down our climate crisis and move into clean energy," Jackson said alarmists once again are claiming that this will be "the death knell of our economy." However, actions such as the clean car deal recently struck with U.S. automakers actually will lead to innovation, she said. "Our inventors and entrepreneurs can take the lead in advanced battery technology for plug-in hybrids and electric cars."

However, Jackson said the fact that there is no price on carbon emissions has a chilling effect on private investments in clean energy technologies.

Jackson emphasized that the scientific evidence is "overwhelming" that man-made greenhouse gas emissions are causing the Earth's climate to change. Leaving the problem for the next generation to solve "is an act of breathtaking negligence," she said.

Jackson warned of an organized effort to sow doubt in people's minds about the science of climate change and noted that "there's some indication that it may be working, on some level."

The EPA chief praised Obama's leadership in the area of climate change, arguing that there has not been a bigger cheerleader for clean energy legislation than the president. "We need Congress to act. We've seen the U.S. House of Representatives act, so now we're frankly waiting on the U.S. Senate," she said.

When asked whether the EPA is planning to forge ahead with establishing a limited carbon trading program for some industries, Jackson responded, "I refuse to speculate because I believe that Congress will step up to this challenge, hopefully sooner rather than later."

Jackson cautioned that people are over-reading Obama's fiscal-year 2011 budget request for the EPA, which includes several million dollars for carbon regulation. "I don't think you should read into this that we have some plan that folks don't know about to force cap and trade," she said. "We don't at all."

BUSINESS INVENTORIES FLAT IN JANUARY

March 15, 2010 – Today in Manufacturing.net

Commerce Department said that inventories were unchanged in January even though sales rose for an eighth consecutive month... continue at this link http://www.manufacturing.net/article.aspx?id=246770

EXPORT GROWTH CONSIDERED BRIGHT SPOT FOR U.S.

March 15, 2010 – Today in Manufacturing.net

U.S. exports dipped in January, but economists predict export growth will be a bright spot for American manufacturers through the rest of 2010 ... continue at this link http://www.manufacturing.net/article.aspx?id=246736

STUDY: MANUFACTURING CFOS OPTIMISTIC FOR 2010

March 15, 2010 – Today in Manufacturing.net

Although energy costs continue to rise and companies still aren't looking to significantly boost employment, small and midsized manufacturing CFOs remain optimistic for 2010 ... continue at this link http://www.manufacturing.net/article.aspx?id=246872

RETAIL SALES MAKE UNEXPECTED RISE IN FEBRUARY

March 15, 2010 – Today in Manufacturing.net

Commerce Department said Friday that retail sales rose 0.3 percent in February, surpassing expectations that sales would decline by 0.2 percent... continue at this link http://www.manufacturing.net/article.aspx?id=246760

TRADE DEFICIT SHRINKS UNEXPECTEDLY IN JANUARY

March 15, 2010 – Today in Manufacturing.net

Commerce Department said U.S. trade deficit unexpectedly shrank in January, reflecting a big drop in imports of oil and foreign cars... continue at this link http://www.manufacturing.net/article.aspx?id=246466

U.S. INDUSTRIAL PRODUCTION EDGES UPWARD

March 15, 2010 – Today in Manufacturing.net

Industrial production rose 0.1 percent in February, beating expectations, but the manufacturing sector produced less, indicating economic recovery is still a ways off... continue at this link http://www.manufacturing.net/article.aspx?id=247006

RECONCILIATION BEING THREATENED

March 15, 2010 NAM

This could be your last opportunity to speak out against costly health reform proposals. Congress is likely to act upon as soon as this week. Since request by President Obama for the House to vote on a comprehensive health reform measure by March 18, behind-the-scenes activities have been in full swing to meet the call. This includes working through a reconciliation package with the Congressional Budget Office (CBO) that may or may not be voted on in tandem with the Senate-passed health bill.

Unfortunately for manufacturers – many of whom already provide generous health benefits to their employees -- we are hearing that the reconciliation package under consideration would further increase costs with higher taxes (likely through the Medicare payroll tax) and costly employer mandates.

Utah’s Congressional delegation is holding firm in opposition to this ill-advised health reform package.

OIL OUTPUT LIKELY TO REMAIN UNCHANGED

March 15, 2010 – Today in Manufacturing.net

With world’s economic recovery feeble and crude prices at preferred levels, OPEC ministers will likely agree to maintain oil production target of 26 million barrels a day... continue at this link http://www.manufacturing.net/article.aspx?id=247010