October 25, 2010
Last week brought positive news on the economic front, with four of the five major indicators improving. (To see all of last week's reports, see the Latest Economic Reports section below.)
Unfortunately, the one report that worsened involved the manufacturing sector. After six consecutive monthly increases, industrial production fell by 0.2 percent in September -- the largest decrease since May 2009. Making up 72 percent of overall industrial production, last month's decline was mainly caused by a 0.1-percent drop in manufacturing production.
The September decline in manufacturing production came right after a sharp deceleration from 0.7-percent growth in July to 0.2-percent growth in August. This is a concerning sign that even though manufacturing continued to recover last quarter, it lost steam throughout the three months ending in September. The drop in manufacturing production last month was mainly due to a 0.2-percent drop in durable goods industries, which more than offset a modest 0.1-percent increase in the nondurable goods sector.
Within durable goods, the drop in output was very diffuse, with eight of the 11 major manufacturing industries posting declines, ranging from capital goods such as machinery, aerospace, computers and electrical equipment to supplies such as wood products, furniture, fabricated metals and primary metals. For half of these industries, this was the second consecutive monthly decline.
For the third quarter overall, manufacturing production rose at an annual rate of 4 percent (see green bars in the chart above), less than half the 8.7-percent pace achieved during the prior four quarters. As a result, manufacturing production remains 9 percent below its level attained in the fourth quarter of 2007 (see blue line in the chart).
With most of the fiscal stimulus and inventory rebuild now in the past, last week's reports add to the mounting evidence that the manufacturing recovery has decelerated significantly from the robust growth achieved earlier in the year.
With most of the fiscal stimulus and inventory rebuild now in the past, last week's reports add to the mounting evidence that the manufacturing recovery has decelerated significantly from the robust growth achieved earlier in the year.
Dave Huether
Chief Economist
National Association of Manufacturers Quick Manufacturing News
To date, 1,627 sites have been listed on the NPL. There have been 346 sites deleted from the NPL with 1,281 sites remaining. Click to continue
To date, 1,627 sites have been listed on the NPL. There have been 346 sites deleted from the NPL with 1,281 sites remaining. Click to continue
Michael O'Malley, Marketing and Communications, USTAR
Oil sands as a component of road pavement could prove a savings for taxpayers and a boon for Uintah Basin industry, according to a recent report released by USTAR.
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Oil sands as a component of road pavement could prove a savings for taxpayers and a boon for Uintah Basin industry, according to a recent report released by USTAR.
{read more}
Utah Talk
Since August, Governor Gary R. Herbert has attended many ribbon cutting ceremonies, groundbreaking events and expansion celebrations. Personal attendance was important to the Governor, who wants to ensure that Utah’s business men and women know of his commitment to economic development in the Beehive State.
Since August, Governor Gary R. Herbert has attended many ribbon cutting ceremonies, groundbreaking events and expansion celebrations. Personal attendance was important to the Governor, who wants to ensure that Utah’s business men and women know of his commitment to economic development in the Beehive State.
Utah Talk
"The rating reflects our view of Utah's young, well-educated workforce and diverse economy, with an unemployment rate that, although rising, remains lower than the national average," said Standard and Poor's credit analyst Misty Newland. "Further supporting the rating is our view of the state's continued good financial management, including proactive budget adjustments to maintain good financial reserves."
"The rating reflects our view of Utah's young, well-educated workforce and diverse economy, with an unemployment rate that, although rising, remains lower than the national average," said Standard and Poor's credit analyst Misty Newland. "Further supporting the rating is our view of the state's continued good financial management, including proactive budget adjustments to maintain good financial reserves."
Utah Talk
Michael Goguen, managing partner at Sequoia Capital, was the keynote speaker at a venture capital roundtable discussion Wednesday hosted by the Governor's Office of Economic Development at the Grand America Hotel. Sequoia was an original investor in numerous successful digital startups, including Google, YouTube, Cisco, Oracle and Apple.
Michael Goguen, managing partner at Sequoia Capital, was the keynote speaker at a venture capital roundtable discussion Wednesday hosted by the Governor's Office of Economic Development at the Grand America Hotel. Sequoia was an original investor in numerous successful digital startups, including Google, YouTube, Cisco, Oracle and Apple.
Utah Talk
Black Diamond Equipment Inc. CEO Peter Metcalf likes to say that "Utah works for Black Diamond."Mark Ritchie, Black Diamond's vice president of operations, explained why during EDCUtah's Quarterly Investor Update meeting Wed., Sept. 29 at the Waterford School.
Black Diamond Equipment Inc. CEO Peter Metcalf likes to say that "Utah works for Black Diamond."Mark Ritchie, Black Diamond's vice president of operations, explained why during EDCUtah's Quarterly Investor Update meeting Wed., Sept. 29 at the Waterford School.
OSHA ANNOUNCES ANOTHER COSTLY REGULATORY ACTION
NAM Capital Briefing
The Occupational Safety and Health Administration (OSHA) has announced its intent to reverse decades-old policy regarding noise exposure standards. Currently, employers may use effective personal protective equipment (PPE) like earplugs rather than extensive engineering and administrative controls that involve noise-dampening technologies for machines and work scheduling to protect employees from excessive levels of noise. The Agency has announced it will reinterpret noise control standards to now require employers to reduce noise levels in the workplace through any possible engineering and administrative overhauls that are "capable of being done" – instead of accepting the use of devices like earplugs – regardless of the costs. The Agency has further indicated that it plans to enforce these changes by instructing OSHA inspectors to cite employers with OSHA violations should they fail to make the required changes.
The Occupational Safety and Health Administration (OSHA) has announced its intent to reverse decades-old policy regarding noise exposure standards. Currently, employers may use effective personal protective equipment (PPE) like earplugs rather than extensive engineering and administrative controls that involve noise-dampening technologies for machines and work scheduling to protect employees from excessive levels of noise. The Agency has announced it will reinterpret noise control standards to now require employers to reduce noise levels in the workplace through any possible engineering and administrative overhauls that are "capable of being done" – instead of accepting the use of devices like earplugs – regardless of the costs. The Agency has further indicated that it plans to enforce these changes by instructing OSHA inspectors to cite employers with OSHA violations should they fail to make the required changes.
EXTENSION OF EXPIRING TAX RATES FACES STIFF HURDLE
Voters have clearly identified jobs as the top issue for the elections. Despite growing calls from the American public, businesses and members of Congress on both sides of the aisle, however, the Administration remains steadfastly opposed to extending all of the low tax rates enacted in 2001 and 2003 that have proven so beneficial to manufacturers and businesses throughout the United States. On October 17, a senior White House official reiterated the Administration's opposition to this vital tax relief for U.S. businesses.
About 73 percent of all manufacturers are organized as S-corporations or other flow-through entities that pay income taxes at the individual rate, and they will be disproportionately impacted by the looming tax increases. Without congressional action:
The top two marginal tax rates will revert to 2001 levels, leaving some manufacturers to face a tax rate of nearly 40 percent.
Capital gains taxes will increase to 20 percent from the current 15 percent.
Dividend tax rates will nearly triple to 39.6 percent from the current rate of 15 percent.
The estate tax will rise from 0 to a job-killing 55 percent with a $1 million exemption.
Small and medium-sized manufacturers will lead our national recovery by acting first to bring back laid-off workers and recruit new employees. However, the Administration's opposition and the congressional uncertainty are forcing businesses to delay or put off hiring plans altogether.
Raising taxes will hurt manufacturers and destroy jobs. Contact your representatives and senators and tell them to oppose these job-killing tax increases.
NAM COALITION GETS FAVORABLE ORDER IN GREENHOUSE GAS LITIGATION
NAM Capital Briefing
The NAM coalition suing the Environmental Protection Agency (EPA) over its greenhouse gas regulations as they apply to stationary sources won a preliminary skirmish in the U.S. Court of Appeals for the D.C. Circuit last week. Over strenuous objections from the EPA and environmental groups, the Court allowed the NAM's motion for a partial stay (suspension) of the rules to be filed. The NAM's motion comprehensively addresses three of the EPA's regulatory decisions that begin the regulation of greenhouse gas emissions from stationary sources on January 2, 2011. The Court's order recognized the interrelatedness of the EPA's four-rule process -- it requires EPA to file a consolidated response by October 28 and requires state and environmental intervenors to file a joint response by November 1. The NAM's final brief in support of a stay is due November 8, and the Court could issue its ruling at any time after that. The principal NAM greenhouse gas suits are described here.
The NAM coalition suing the Environmental Protection Agency (EPA) over its greenhouse gas regulations as they apply to stationary sources won a preliminary skirmish in the U.S. Court of Appeals for the D.C. Circuit last week. Over strenuous objections from the EPA and environmental groups, the Court allowed the NAM's motion for a partial stay (suspension) of the rules to be filed. The NAM's motion comprehensively addresses three of the EPA's regulatory decisions that begin the regulation of greenhouse gas emissions from stationary sources on January 2, 2011. The Court's order recognized the interrelatedness of the EPA's four-rule process -- it requires EPA to file a consolidated response by October 28 and requires state and environmental intervenors to file a joint response by November 1. The NAM's final brief in support of a stay is due November 8, and the Court could issue its ruling at any time after that. The principal NAM greenhouse gas suits are described here.
Today in Manufacturing
Future tractor-trailers, school buses, delivery vans, garbage trucks and heavy-duty pickup trucks must do better under first-ever fuel efficiency rules ... continue
Future tractor-trailers, school buses, delivery vans, garbage trucks and heavy-duty pickup trucks must do better under first-ever fuel efficiency rules ... continue
Quick Manufacturing
The U.S. Department of Labor's Bureau of Labor Statistics announced that nonfatal workplace injuries and illnesses among private industry employers declined in 2009 to a rate of 3.6 cases per 100 equivalent full-time workers, down from a total case rate of 3.9 in 2008. Combined, the manufacturing and construction industry sectors represented more than half of the total decline in injuries and illnesses in 2009. Click to continue
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