This week's economic report brings generally mixed news. Of the eight major economic indicators that came out last week, three improved, three declined, one slowed and one remained unchanged.Three of last week's reports were on the manufacturing sector. While industrial production edged up 0.1 percent in February, this increase was mainly due to a 2-percent gain in mining activity. The manufacturing sector, which accounts for 80 percent of industrial production, edged down 0.2 percent, with 10 of the 19 major manufacturing industries posting production declines. More recently, regional manufacturing reports for March showed that conditions remained solid this month, which is encouraging.
On the negative side, sour reports on homebuilder confidence and residential construction show that the housing market has yet to gain significant traction despite the enacted homebuyer tax credits. (To see all of last week's indicators, see the Latest Economic Reports section below.)
While conditions in the manufacturing sector have improved significantly from a year ago, when nearly every industry was in recession, the pace of the recovery has moderated over the past few months (see black line in chart above, which shows the 3-month change (at an annual rate) of manufacturing production). After peaking at 15-percent growth last September, the pace gradually decelerated 2.8 percent in February, with a majority of industries posting declines in output in three of the past five months. So, to date, the upturn in manufacturing production has not been diffuse.
Over the past year (through February), the state of manufacturing evolved along four basic tracks. First, some definitions:
(1) Struggling: positive output over the past year, but declining in recent months.
(2) Recession: declining output both over the past year and in recent months.
(3) Recovering: declining output over the past year, but increasing in recent months.
(4) Expansion: positive output both over the past year and in recent months.
(2) Recession: declining output both over the past year and in recent months.
(3) Recovering: declining output over the past year, but increasing in recent months.
(4) Expansion: positive output both over the past year and in recent months.
(1) Struggling. Three of the 19 major manufacturing industries are struggling (paper, motor vehicles and miscellaneous manufacturing (mainly medical equipment)). These industries account for 15 percent of manufacturing production.
(2) Recession. Five industries remain in recession (printing, petroleum, nonmetallic minerals, aerospace, and furniture). These industries account for 17 percent of manufacturing production.
(3) Recovery. Four industries are in recovery (wood products, fabricated metals, electrical equipment and machinery). These industries account for 18 percent of manufacturing production.
(4) Expansion. Seven industries are expanding (food products, textiles, apparel, chemicals, plastics, primary metals and computer and electronics). These industries account for 50 percent of manufacturing production.
So, with a third of manufacturing either still in recession or struggling, the best description of the manufacturing sector of the economy is fragile.
Dave Huether
Chief Economist
National Association of Manufacturers
INCUMBENT LEGISLATORS NOT SEEKING RE-ELECTION IN 2010
March 22, 2010 – UMA on the Hill
With the 2010 General Election filing date past, it has been revealed that several incumbent legislators are not seeking re-election for a variety of reasons. This is not an uncommon thing in a state like Utah with a citizen legislature.
Announcing their intent to not seek re-election, either by not filing, or more formerly are a host of sitting members of the Utah House of Representatives.
· Fred Hunsaker, District 4 (R) Cache County – Retiring
· Kerry Gibson, District 6 (R) Weber County – Running for Weber County Commission
· Brent Wallis, District 10 (R) Weber County – Retiring
· Douglas Aagard, District 15 (R) Weber County – Retiring
· Kevin Garn, District 16 (R) Davis County – Resigned
· Sheryl Allen, District 19 (R) Davis County – Retiring
· Christine Johnson, District 25 (D) Salt Lake County – Retiring
· Phil Riesen, District 36 (D) Salt Lake County – Retiring
· Lorie Fowlke, District 59 (R) Utah County – Retiring
· Stephen Clark, District 63 (R) Utah County – Retiring to serve LDS mission
Some of the retirements were anticipated but some come as a surprise following the filing date. Without doubt there will be some new faces in the Utah House of Representatives.
Roughly half the Utah Senators are up for re-election this year but none have failed to file.
With the 2010 General Election filing date past, it has been revealed that several incumbent legislators are not seeking re-election for a variety of reasons. This is not an uncommon thing in a state like Utah with a citizen legislature.
Announcing their intent to not seek re-election, either by not filing, or more formerly are a host of sitting members of the Utah House of Representatives.
· Fred Hunsaker, District 4 (R) Cache County – Retiring
· Kerry Gibson, District 6 (R) Weber County – Running for Weber County Commission
· Brent Wallis, District 10 (R) Weber County – Retiring
· Douglas Aagard, District 15 (R) Weber County – Retiring
· Kevin Garn, District 16 (R) Davis County – Resigned
· Sheryl Allen, District 19 (R) Davis County – Retiring
· Christine Johnson, District 25 (D) Salt Lake County – Retiring
· Phil Riesen, District 36 (D) Salt Lake County – Retiring
· Lorie Fowlke, District 59 (R) Utah County – Retiring
· Stephen Clark, District 63 (R) Utah County – Retiring to serve LDS mission
Some of the retirements were anticipated but some come as a surprise following the filing date. Without doubt there will be some new faces in the Utah House of Representatives.
Roughly half the Utah Senators are up for re-election this year but none have failed to file.
HOUSE BILL 181 WORKERS COMPENSATION BENEFITS—SOCIAL SECURITY OFFSETS – THE HISTORICAL PERSPECTIVE
March 22, 2010 – Utah Labor Commission
H.B. 181 codifies the effect of the two “Merrill” decisions issued by the Utah Supreme Court during 2009.
Section 413(5) of the Utah Workers’ Compensation Act allowed insurance companies and self-insured employers to offset injured workers’ social security retirement benefits against their permanent total disability compensation. The first Merrill decision, issued on April 24, 2009, struck down §413(5) as an unconstitutional violation of the “uniform operation of laws” provision of the Utah Constitution. The second Merrill decision, issued December 4, 2009, required insurance companies and self-insured employers to repay social security offsets previously taken pursuant to §413(5), except that repayment was not required for: 1) disputed claims settled before the Court issued its first Merrill decision; 2) cases settled on a lump-sum basis; and 3) claims of deceased individuals.
Consistent with the Supreme Court’s decision in the first Merrill decision, H.B. 181 strikes §413(5) from the Utah Workers’ Compensation Act as of April 24, 2009. H.B. 181 leaves intact the Supreme Court’s second Merrill decision requiring repayment of some, but not all, social security offsets that were taken against permanent total disability claims in the past. The bill also includes a statement that the Legislature’s repeal of §413(5) does not represent a legislative judgment that such social security offsets are inappropriate in other circumstances. Finally, H.B. 181 requires the Commission to report to the Legislature by November 2010 regarding: 1) the status of cases for which the Employers' Reinsurance Fund pays permanent total disability compensation; and 2) the Labor Commission’s process for implementing the Merrill decisions.
UMA supported this change to comport with the Supreme Court decisions.
H.B. 181 codifies the effect of the two “Merrill” decisions issued by the Utah Supreme Court during 2009.
Section 413(5) of the Utah Workers’ Compensation Act allowed insurance companies and self-insured employers to offset injured workers’ social security retirement benefits against their permanent total disability compensation. The first Merrill decision, issued on April 24, 2009, struck down §413(5) as an unconstitutional violation of the “uniform operation of laws” provision of the Utah Constitution. The second Merrill decision, issued December 4, 2009, required insurance companies and self-insured employers to repay social security offsets previously taken pursuant to §413(5), except that repayment was not required for: 1) disputed claims settled before the Court issued its first Merrill decision; 2) cases settled on a lump-sum basis; and 3) claims of deceased individuals.
Consistent with the Supreme Court’s decision in the first Merrill decision, H.B. 181 strikes §413(5) from the Utah Workers’ Compensation Act as of April 24, 2009. H.B. 181 leaves intact the Supreme Court’s second Merrill decision requiring repayment of some, but not all, social security offsets that were taken against permanent total disability claims in the past. The bill also includes a statement that the Legislature’s repeal of §413(5) does not represent a legislative judgment that such social security offsets are inappropriate in other circumstances. Finally, H.B. 181 requires the Commission to report to the Legislature by November 2010 regarding: 1) the status of cases for which the Employers' Reinsurance Fund pays permanent total disability compensation; and 2) the Labor Commission’s process for implementing the Merrill decisions.
UMA supported this change to comport with the Supreme Court decisions.
SENATE BILL 231 MEDICAL BENEFITS UNDER WORKERS COMPENSATION – THE REASON IT WAS INTRODUCED
March 22, 2010 – Utah Labor Commission
S.B. 231 eliminates the “3-year incur and submit” requirement of the Utah Workers’ Compensation Act that applied to workers’ compensation claims for injuries occurring between July 1, 1988, and April 30, 2007.
In 1988, the Workers’ Compensation Act was amended to deny all future medical benefits to any injured worker who allowed more than three years to pass without receiving medical treatment of his or her work injury and submitting the expense of such treatment to the employer or insurance carrier. This provision was removed from § 417(1) of the Act in 2007 and replaced with a less-harsh provision that only terminated an injured worker’s right to payment of a particular medical expense if that expense was not submitted for payment within one year from the date of treatment. However, because the 2007 amendment was not retroactive, the “three-year incur and submit” requirement continued to apply to workers’ compensation claims arising from injuries between July 1, 1988, and April 30, 2007.
Senate Bill 231 makes the 2007 amendment to §417(1) retroactive to claims arising from injuries after July 1, 1988. Consequently, claims for medical benefits arising from all work injuries after that date will be treated the same, and will be subject only to the “1-year submission rule” that was established by the 2007 amendment.
S.B. 231 eliminates the “3-year incur and submit” requirement of the Utah Workers’ Compensation Act that applied to workers’ compensation claims for injuries occurring between July 1, 1988, and April 30, 2007.
In 1988, the Workers’ Compensation Act was amended to deny all future medical benefits to any injured worker who allowed more than three years to pass without receiving medical treatment of his or her work injury and submitting the expense of such treatment to the employer or insurance carrier. This provision was removed from § 417(1) of the Act in 2007 and replaced with a less-harsh provision that only terminated an injured worker’s right to payment of a particular medical expense if that expense was not submitted for payment within one year from the date of treatment. However, because the 2007 amendment was not retroactive, the “three-year incur and submit” requirement continued to apply to workers’ compensation claims arising from injuries between July 1, 1988, and April 30, 2007.
Senate Bill 231 makes the 2007 amendment to §417(1) retroactive to claims arising from injuries after July 1, 1988. Consequently, claims for medical benefits arising from all work injuries after that date will be treated the same, and will be subject only to the “1-year submission rule” that was established by the 2007 amendment.
U.K. ECONOMY EXPECTED TO BE SLUGGISH IN 2010
March 22, 2010 – Today in Manufacturing.net
Industry group says Britain’s economy will remain fragile through the middle of next year as stimulus measures including car scrappage scheme come to an end in the first quarter... continue
Industry group says Britain’s economy will remain fragile through the middle of next year as stimulus measures including car scrappage scheme come to an end in the first quarter... continue
BEIJING WARNS U.S. AGAINST SANCTIONS OVER CURRENCY
March 22, 2010 – Today in Manufacturing.net
China's commerce minister warned the U.S. against imposing trade sanctions over Beijing's currency controls, and said his country was likely to report a trade deficit in March... continue
China's commerce minister warned the U.S. against imposing trade sanctions over Beijing's currency controls, and said his country was likely to report a trade deficit in March... continue
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