May 2, 2011
The U.S. economy slowed somewhat in the first quarter of 2011, growing at an annualized 1.8 percent, down from 3.1 percent in the fourth quarter of 2010. Increased energy costs, weather and supply chain disruptions, cuts to government spending and a higher trade imbalance weighed down the results. Manufacturers, which are heavy users of energy, are negatively affected by higher oil prices, impacting their ability to grow and create jobs. On the positive side, the nation's real gross domestic product (GDP) experienced growth for the seventh consecutive quarter, and that trend is expected to continue throughout the rest of 2011.
One of the strongest components of real GDP has been the manufacturing sector, particularly durable goods, which rose 10.6 percent for the quarter. The accompanying chart shows year-to-year percentage changes in our consumption of durables. Sales of motor vehicles have seen a resurgence, up 13.1 percent and 17.5 percent at the annual rate, respectively, for the fourth quarter of 2010 and the first quarter of 2011. Nondurable goods and services also grew in the first quarter, albeit not at the pace seen in the prior quarter.
In his first-ever press conference last week, Federal Reserve Chairman Ben Bernanke spoke optimistically about the economy but noted the inflationary pressures felt by individuals and businesses. He stated that the price increases in energy and other commodities were "transitory" but that he and the rest of the Federal Open Market Committee (FOMC) would continue to monitor the situation.
To many observers, the language of the FOMC statement and the comments by the Chairman suggest that the Fed is slowly starting to shift policy toward inflation, despite the public view that it is not worried about it. This could suggest that interest rates will begin to creep upward later this year or early next year. In the meantime, though, the Fed has kept interest rates at record lows.
As we saw with the release of the Philadelphia Federal Reserve survey the previous week, manufacturing activity in April slowed somewhat in reports issued by the Dallas and Kansas City Federal Reserve Banks. In each case, their measures of business activity declined but remained positive, suggesting continued but slower growth in their regions. Both of these surveys reflect pricing pressures due to higher raw materials costs. Overall, their expectations for future orders were positive.
This week, we should continue to see evidence of a recovery in the manufacturing sector, but as with the Federal Reserve surveys, there will be some cooling in April from the months before. Later this week, we will see numbers on productivity and employment, and this morning, the Institute for Supply Management (ISM) will release its index on manufacturing activity. Perhaps foreshadowing this figure, the ISM's index of business activity in the Chicago region on Friday showed continued growth overall, but with new orders and production lower in April. At least part of that decline is attributed to supply disruptions, particularly in the automotive sector due to the Japanese tsunami. Looking ahead, though, the numbers also suggest continued growth.
Chad Moutray
Chief Economist
National Association of Manufacturers
CLEARFIELD -- When Richard Hendrickson began working as a graveyard-shift welder 23 years ago at Lifetime Products Inc., he expected it to be a job that helped him through college. Little did he know that one day he would be running the company.
Hendrickson, now president of Lifetime Products, and his co-workers are getting ready to celebrate the company's 25th anniversary.
What started in 1986 as "some guys making basketball hoops in a garage," Hendrickson said, has turned into the world's largest manufacturer of blow-molded polyethylene folding tables, picnic tables and chairs, and residential basketball hoops.
"We've got a lot of history, a lot of opportunities and a lot of lives that we've been able to affect," Hendrickson said. "We strive to give lots of people opportunities to grow and learn. There are a lot of stories like mine."
To celebrate its 25th anniversary, Lifetime Products plans to give away 25 adjustable basketball hoops by the end of 2011. The giveaways begin next week, said Katie Salter, public relations and communications manager of Lifetime Products.
Those hoping to win one of the hoops must enter a drawing on the company's Facebook page and answer a few research questions dealing with basketball hoops.
"We do a lot of market research, in house, in more quantifiable ways, but we've been doing Facebook and Twitter the last few years, and we love the feedback from there and we pass it on," Salter said.
Lifetime Products has 1,300 full-time employees and 300 part-time employees, all working in Davis County. Nearly 80 percent of the senior management team at Lifetime Products started at entry-level positions with the company. Then they worked their way up, just like Hendrickson.
Hendrickson spent time in manufacturing, research and development, and sales and marketing before he headed up the initial creation of the company's international division. He was later promoted to vice president of sporting goods before Barry Mower, the company's owner, made him president almost five years ago.
Lifetime Products' initial product was the first Quick Adjust basketball pole. Since then, while manufacturing more than 10 million adjustable basketball systems sold in more than 58 countries, the company has expanded to several more products, including folding chairs and tables, playground equipment, storage sheds and kayaks.
Hendrickson said Lifetime Products ships equipment to 56 countries and has operations in Mexico and China.
"Twenty-five years is kind of fun to celebrate," Hendrickson said. "We plan on being here for a 50-year anniversary party as well."
Does that mean Lifetime Products will then be giving away 50 basketball hoops?
"By then, hopefully we can do that," Hendrickson said with a laugh.
ATK has received more than $16 million in non-standard (non-NATO) ammunition orders through a multi-year contract with the U.S. Army Contracting Command in Rock Island, Ill.
View Full Article
Zions Bancorp has sold its majority stake in a company that develops digital identity authentication products for banks to an Indian software firm, but it is keeping a substantial minority share.
Polaris Software Lab Ltd., a Chennai, India-based company, bought control of IdenTrust Inc. from Zions for an undisclosed sum, the two companies announced earlier this week.
On Thursday, Zions spokesman James Abbott declined to discuss the sale.
However, the transfer of control of New York-based IdenTrust to Polaris marks the second time in less than a year that Zions has sold a business that develops financial technology.
In August, Zions sold most of the assets of its NetDeposit subsidiary, which invented some of the first remote-deposit and electronic-payment products for banks and their customers.
IdenTrust makes products that provide certainty that documents and signatures transmitted digitally are authentic.
Zions has been a part-owner of IdenTrust and predecessor companies that developed the technology since 1996, Zions Chief Financial Officer Doyle Arnold said.
“They have revolutionized the identity authentication solutions business across the U.S., and we are confident that the addition of Polaris’s experience and reach in the [banking, financial services and insurance] sector would only add to its success globally,” Arnold said in a statement.
The current version of the company was started in 1996 by Zions and several other banks that included Citigroup, Bank of America and Barclays.
Besides Zions, it isn’t clear whether any of the founding banks still own stakes in IdenTrust. Company representatives didn’t return requests for comment.
National Association of Manufacturers
National Association of Manufacturers (NAM) Vice President for Tax and Domestic Economic Policy Dorothy Coleman issued the following statement today regarding the Department of the Treasury’s announcement on foreign exchange swaps and forwards:
“The use of foreign exchange swaps is critical for manufacturers of all sizes to guard against fluctuations in foreign currencies that could significantly increase costs. Manufacturers are pleased with Treasury's announced proposal to exempt foreign exchange swaps and forwards from the definition of a "swap" under the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
For many manufacturers, managing fluctuating currency exchange rates is the primary focus of their risk management and hedging programs. In today’s global economy more and more small and medium-sized manufacturers are exporting to new markets, and the proposal announced today would help ensure that they could manage currency fluctuations in a cost-effective manner.
As the U.S. economy continues to recover, it is critical that any new regulations on derivatives not inadvertently hinder economic growth. In particular, regulations that make hedging too expensive will add additional burdens on manufacturers, limiting their ability to expand and create jobs.”
NAM Blog “Shopfloor”
The Manufacturers' Shopfloor blog reported attorney Peter Kirsanow, "a former member of the National Labor Relations Board today reaffirmed the NLRB's authority to punish companies that close facilities, eliminate jobs and relocate to escape union contracts, but said the board's recent complaint against Boeing does not fall under that 'runaway shops' category under federal labor law." Kirsanow explained that normally, "runaway shop" cases involve a company that "decides not to bargain with a union about the company's decision to move from an existing unionized location to a non-union one." But in the case of Boeing, Kirsanow noted, there was no transfer of existing jobs away from Washington to South Carolina. As a result, "employers have reason to be deeply concerned about the implications of the NLRB's move because it effectively countermands Boeing's decision to 'locate work in a manner it deems best for business operations, for its economics and finances,' Kirsanow said."
SmartBrief on Leadership
Donald Trump is considering a bid to swap the boardroom for the Oval Office. It's unclear whether he is serious about running for the presidency, but supporters say it would be foolhardy for anyone to underestimate him. "I think he has the stature and the education and the requisite toughness to be president," says Trump's unofficial campaign chief, Roger Stone. "They didn't take Reagan seriously, either." Bloomberg Businessweek
Today in Manufacturing
Recent economic struggles are a harsh reminder that continuous improvement is the only way for American manufacturers to succeed on a long term basis ... continue
Quick Manufacturing News
Growth in new orders, production, employment and supplier deliveries slowed. Click to continue
Quick Manufacturing News
The most important supply chain-related educational needs for mid-sized manufacturers over the next 12-18 months are sourcing and procurement education (45%), strategy and leadership (41%), risk management (41%) and demand management (34%). Click to continue
Quick Manufacturing News
The National Hearing Conservation Association urged the agency to 'renew its focus on noise control despite the current climate of economic adversity.' Click to continue
Quick Manufacturing News
Purchasing activity grew substantially during April. Click to continue
Today in Manufacturing
It is much easier to build a growing, thriving, and profitable business when the economy is expanding and more companies are investing in product development ... continue
Today in Manufacturing
American manufacturing activity grew for the 21st straight month in April, fueled by a weak dollar that has made U.S. goods cheaper overseas ... continue
The Social Security Administration (SSA) announced it will resume sending out No-Match letters to employers. This ends a long break that began when the No-Match regulation of the Department of Homeland Security (DHS) was blocked by a federal court in 2007 (the DHS ultimately rescinded the regulation in 2009). As before, the SSA will send a No-Match letter to an employer if it finds that an employee name or a Social Security number (SSN) on a Form W-2 does not match SSA records. If you receive no-match letter, the SSA instructs you to:
1. Review your own records for errors;
2. Inform the employee of the No-Match letter;
3. Ask the employee to review their records to determine if the information was accurately recorded/reported;
4. Instruct the employee to contact the SSA to resolve any discrepancy;
5. Provide the employee a reasonable period of time to resolve the discrepancy (we advise at least 30 days and up to 120 days);
6. Document your efforts to resolve the matter; and
7. If an error occurred, correct it with SSA and the IRS.
The letter is not a statement about the employee's immigration status, and should not be the basis, in and of itself, for taking any adverse action against the employee. However, ICE officials routinely request copies of such letters during Form I-9 audits.
When employing workers under age 18, don't overlook child labor laws – violations can be costly. Federal law imposes a civil money penalty of up to $11,000 for each child labor violation (which increases to $50,000 for a violation causing death or serious injury; $100,000 if that violation was repeated or willful). A minor's specific age may limit hours and/or type of work.
In March, the U.S. Department of Labor announced an assessment of $277,475 in penalties against three national cinema chains for allowing minors to perform hazardous work (e.g., operating paper balers and trash compactors, operating motor vehicles, and using dough mixers) and for allowing them to work longer hours than the law permits. Carefully review and become familiar with our publication, Employment of Minors (age 14 through 17) in Utah, this publication can be found in the Members Only section of our website, www.ecutah.org/member.
The U.S. economy slowed somewhat in the first quarter of 2011, growing at an annualized 1.8 percent, down from 3.1 percent in the fourth quarter of 2010. Increased energy costs, weather and supply chain disruptions, cuts to government spending and a higher trade imbalance weighed down the results. Manufacturers, which are heavy users of energy, are negatively affected by higher oil prices, impacting their ability to grow and create jobs. On the positive side, the nation's real gross domestic product (GDP) experienced growth for the seventh consecutive quarter, and that trend is expected to continue throughout the rest of 2011.
One of the strongest components of real GDP has been the manufacturing sector, particularly durable goods, which rose 10.6 percent for the quarter. The accompanying chart shows year-to-year percentage changes in our consumption of durables. Sales of motor vehicles have seen a resurgence, up 13.1 percent and 17.5 percent at the annual rate, respectively, for the fourth quarter of 2010 and the first quarter of 2011. Nondurable goods and services also grew in the first quarter, albeit not at the pace seen in the prior quarter.
In his first-ever press conference last week, Federal Reserve Chairman Ben Bernanke spoke optimistically about the economy but noted the inflationary pressures felt by individuals and businesses. He stated that the price increases in energy and other commodities were "transitory" but that he and the rest of the Federal Open Market Committee (FOMC) would continue to monitor the situation.
To many observers, the language of the FOMC statement and the comments by the Chairman suggest that the Fed is slowly starting to shift policy toward inflation, despite the public view that it is not worried about it. This could suggest that interest rates will begin to creep upward later this year or early next year. In the meantime, though, the Fed has kept interest rates at record lows.
As we saw with the release of the Philadelphia Federal Reserve survey the previous week, manufacturing activity in April slowed somewhat in reports issued by the Dallas and Kansas City Federal Reserve Banks. In each case, their measures of business activity declined but remained positive, suggesting continued but slower growth in their regions. Both of these surveys reflect pricing pressures due to higher raw materials costs. Overall, their expectations for future orders were positive.
This week, we should continue to see evidence of a recovery in the manufacturing sector, but as with the Federal Reserve surveys, there will be some cooling in April from the months before. Later this week, we will see numbers on productivity and employment, and this morning, the Institute for Supply Management (ISM) will release its index on manufacturing activity. Perhaps foreshadowing this figure, the ISM's index of business activity in the Chicago region on Friday showed continued growth overall, but with new orders and production lower in April. At least part of that decline is attributed to supply disruptions, particularly in the automotive sector due to the Japanese tsunami. Looking ahead, though, the numbers also suggest continued growth.
Chad Moutray
Chief Economist
National Association of Manufacturers
CLEARFIELD'S LIFETIME PRODUCTS CELEBRATES 25 YEARS
By Jasen Asay - Standard-Examiner Davis BureauCLEARFIELD -- When Richard Hendrickson began working as a graveyard-shift welder 23 years ago at Lifetime Products Inc., he expected it to be a job that helped him through college. Little did he know that one day he would be running the company.
Hendrickson, now president of Lifetime Products, and his co-workers are getting ready to celebrate the company's 25th anniversary.
What started in 1986 as "some guys making basketball hoops in a garage," Hendrickson said, has turned into the world's largest manufacturer of blow-molded polyethylene folding tables, picnic tables and chairs, and residential basketball hoops.
"We've got a lot of history, a lot of opportunities and a lot of lives that we've been able to affect," Hendrickson said. "We strive to give lots of people opportunities to grow and learn. There are a lot of stories like mine."
To celebrate its 25th anniversary, Lifetime Products plans to give away 25 adjustable basketball hoops by the end of 2011. The giveaways begin next week, said Katie Salter, public relations and communications manager of Lifetime Products.
Those hoping to win one of the hoops must enter a drawing on the company's Facebook page and answer a few research questions dealing with basketball hoops.
"We do a lot of market research, in house, in more quantifiable ways, but we've been doing Facebook and Twitter the last few years, and we love the feedback from there and we pass it on," Salter said.
Lifetime Products has 1,300 full-time employees and 300 part-time employees, all working in Davis County. Nearly 80 percent of the senior management team at Lifetime Products started at entry-level positions with the company. Then they worked their way up, just like Hendrickson.
Hendrickson spent time in manufacturing, research and development, and sales and marketing before he headed up the initial creation of the company's international division. He was later promoted to vice president of sporting goods before Barry Mower, the company's owner, made him president almost five years ago.
Lifetime Products' initial product was the first Quick Adjust basketball pole. Since then, while manufacturing more than 10 million adjustable basketball systems sold in more than 58 countries, the company has expanded to several more products, including folding chairs and tables, playground equipment, storage sheds and kayaks.
Hendrickson said Lifetime Products ships equipment to 56 countries and has operations in Mexico and China.
"Twenty-five years is kind of fun to celebrate," Hendrickson said. "We plan on being here for a 50-year anniversary party as well."
Does that mean Lifetime Products will then be giving away 50 basketball hoops?
"By then, hopefully we can do that," Hendrickson said with a laugh.
ATK AWARDED $16 MILLION IN ORDERS FOR NON-STANDARD AMMUNITION
Utah BusinessATK has received more than $16 million in non-standard (non-NATO) ammunition orders through a multi-year contract with the U.S. Army Contracting Command in Rock Island, Ill.
View Full Article
ZIONS SELLS CONTROL OF ANOTHER FINANCIAL TECHNOLOGY BUSINESS
By Paul Beebe - The Salt Lake TribuneZions Bancorp has sold its majority stake in a company that develops digital identity authentication products for banks to an Indian software firm, but it is keeping a substantial minority share.
Polaris Software Lab Ltd., a Chennai, India-based company, bought control of IdenTrust Inc. from Zions for an undisclosed sum, the two companies announced earlier this week.
On Thursday, Zions spokesman James Abbott declined to discuss the sale.
However, the transfer of control of New York-based IdenTrust to Polaris marks the second time in less than a year that Zions has sold a business that develops financial technology.
In August, Zions sold most of the assets of its NetDeposit subsidiary, which invented some of the first remote-deposit and electronic-payment products for banks and their customers.
IdenTrust makes products that provide certainty that documents and signatures transmitted digitally are authentic.
Zions has been a part-owner of IdenTrust and predecessor companies that developed the technology since 1996, Zions Chief Financial Officer Doyle Arnold said.
“They have revolutionized the identity authentication solutions business across the U.S., and we are confident that the addition of Polaris’s experience and reach in the [banking, financial services and insurance] sector would only add to its success globally,” Arnold said in a statement.
The current version of the company was started in 1996 by Zions and several other banks that included Citigroup, Bank of America and Barclays.
Besides Zions, it isn’t clear whether any of the founding banks still own stakes in IdenTrust. Company representatives didn’t return requests for comment.
TREASURY PROPOSAL ON DERIVATIVES MARKET A KEY STEP FORWARD
Rule Would Allow Manufacturers to Manage Fluctuating CurrenciesNational Association of Manufacturers
National Association of Manufacturers (NAM) Vice President for Tax and Domestic Economic Policy Dorothy Coleman issued the following statement today regarding the Department of the Treasury’s announcement on foreign exchange swaps and forwards:
“The use of foreign exchange swaps is critical for manufacturers of all sizes to guard against fluctuations in foreign currencies that could significantly increase costs. Manufacturers are pleased with Treasury's announced proposal to exempt foreign exchange swaps and forwards from the definition of a "swap" under the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
For many manufacturers, managing fluctuating currency exchange rates is the primary focus of their risk management and hedging programs. In today’s global economy more and more small and medium-sized manufacturers are exporting to new markets, and the proposal announced today would help ensure that they could manage currency fluctuations in a cost-effective manner.
As the U.S. economy continues to recover, it is critical that any new regulations on derivatives not inadvertently hinder economic growth. In particular, regulations that make hedging too expensive will add additional burdens on manufacturers, limiting their ability to expand and create jobs.”
NAM Blog “Shopfloor”
The Manufacturers' Shopfloor blog reported attorney Peter Kirsanow, "a former member of the National Labor Relations Board today reaffirmed the NLRB's authority to punish companies that close facilities, eliminate jobs and relocate to escape union contracts, but said the board's recent complaint against Boeing does not fall under that 'runaway shops' category under federal labor law." Kirsanow explained that normally, "runaway shop" cases involve a company that "decides not to bargain with a union about the company's decision to move from an existing unionized location to a non-union one." But in the case of Boeing, Kirsanow noted, there was no transfer of existing jobs away from Washington to South Carolina. As a result, "employers have reason to be deeply concerned about the implications of the NLRB's move because it effectively countermands Boeing's decision to 'locate work in a manner it deems best for business operations, for its economics and finances,' Kirsanow said."
SmartBrief on Leadership
Donald Trump is considering a bid to swap the boardroom for the Oval Office. It's unclear whether he is serious about running for the presidency, but supporters say it would be foolhardy for anyone to underestimate him. "I think he has the stature and the education and the requisite toughness to be president," says Trump's unofficial campaign chief, Roger Stone. "They didn't take Reagan seriously, either." Bloomberg Businessweek
Today in Manufacturing
Recent economic struggles are a harsh reminder that continuous improvement is the only way for American manufacturers to succeed on a long term basis ... continue
Quick Manufacturing News
Growth in new orders, production, employment and supplier deliveries slowed. Click to continue
Quick Manufacturing News
The most important supply chain-related educational needs for mid-sized manufacturers over the next 12-18 months are sourcing and procurement education (45%), strategy and leadership (41%), risk management (41%) and demand management (34%). Click to continue
Quick Manufacturing News
The National Hearing Conservation Association urged the agency to 'renew its focus on noise control despite the current climate of economic adversity.' Click to continue
Quick Manufacturing News
Purchasing activity grew substantially during April. Click to continue
Today in Manufacturing
It is much easier to build a growing, thriving, and profitable business when the economy is expanding and more companies are investing in product development ... continue
Today in Manufacturing
American manufacturing activity grew for the 21st straight month in April, fueled by a weak dollar that has made U.S. goods cheaper overseas ... continue
SSA RESUMES NO-MATCH LETTERS
The Employers CouncilThe Social Security Administration (SSA) announced it will resume sending out No-Match letters to employers. This ends a long break that began when the No-Match regulation of the Department of Homeland Security (DHS) was blocked by a federal court in 2007 (the DHS ultimately rescinded the regulation in 2009). As before, the SSA will send a No-Match letter to an employer if it finds that an employee name or a Social Security number (SSN) on a Form W-2 does not match SSA records. If you receive no-match letter, the SSA instructs you to:
1. Review your own records for errors;
2. Inform the employee of the No-Match letter;
3. Ask the employee to review their records to determine if the information was accurately recorded/reported;
4. Instruct the employee to contact the SSA to resolve any discrepancy;
5. Provide the employee a reasonable period of time to resolve the discrepancy (we advise at least 30 days and up to 120 days);
6. Document your efforts to resolve the matter; and
7. If an error occurred, correct it with SSA and the IRS.
The letter is not a statement about the employee's immigration status, and should not be the basis, in and of itself, for taking any adverse action against the employee. However, ICE officials routinely request copies of such letters during Form I-9 audits.
EMPLOYING MINORS
The Employers CouncilWhen employing workers under age 18, don't overlook child labor laws – violations can be costly. Federal law imposes a civil money penalty of up to $11,000 for each child labor violation (which increases to $50,000 for a violation causing death or serious injury; $100,000 if that violation was repeated or willful). A minor's specific age may limit hours and/or type of work.
In March, the U.S. Department of Labor announced an assessment of $277,475 in penalties against three national cinema chains for allowing minors to perform hazardous work (e.g., operating paper balers and trash compactors, operating motor vehicles, and using dough mixers) and for allowing them to work longer hours than the law permits. Carefully review and become familiar with our publication, Employment of Minors (age 14 through 17) in Utah, this publication can be found in the Members Only section of our website, www.ecutah.org/member.
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