Based on a number of indicators last week, the domestic manufacturing economy is starting to get its groove back after a couple of rough months. Industrial production rose 0.7 percent in October – twice what many analysts had anticipated. The increase was fairly broad-based across a number of sectors, with durable goods industries experiencing the largest gains. Moreover, regional surveys of manufacturing activity from the New York and Philadelphia Federal Reserve Banks found that respondents were more optimistic about production and employment growth over the next six months than in prior reports.
Cautious optimism is probably still warranted, however. The Philadelphia Fed survey experienced a slowdown from last month's assessment of overall business activity, with new orders and shipments growing more gradually. Likewise, the Empire State Manufacturing Survey was only barely positive after spending five consecutive months in negative territory. This was an improvement, but mostly in that conditions did not worsen. Moving forward, manufacturers in these regions are significantly more upbeat, but they are also closely watching developments in U.S. budget negotiations and European financial challenges.
The price of oil provided one of the better ironies of the week. On the day that the Bureau of Labor Statistics released data suggesting that inflationary pressures had eased, mostly due to lower energy costs, the price of oil jumped to over $100 a barrel. Volatility in energy prices has had a large sway on both the consumer price index (CPI) and producer price index (PPI) lately, but in the October numbers, both of them fell. Lower food and energy costs were the primary drivers of this decrease, which extended to the crude and intermediate levels. Overall inflationary pressures continue to be modest, however, with the CPI up between 3.5 percent and 4 percent for the year (or 2.1 percent, when energy and food prices are excluded). Nonetheless, pricing pressures remain a top concern for manufacturers, who continue to experience elevated costs that squeeze profits.
In other positive news, the housing sector is beginning to show some gradual signs of improvement. Housing permits jumped significantly in October, and housing starts remained solid (despite a slight drop) on strength in single-family residential construction. While significant hurdles remain in this market, the number of potential buyers is rising. This finding was echoed in the Housing Market Index produced by the National Association of Home Builders and Wells Fargo.
A lot of data will trickle out over the next couple of days. We will continue to hear about increased consumer spending – something that will be tested as retailers gear up for holiday sales after Thanksgiving. On Wednesday, we will get new data on personal income and spending as well as the latest sense of consumer sentiment. Manufacturers will also closely look at October durable goods figures and new regional surveys from the Kansas City and Richmond Federal Reserve Banks. Finally, the Bureau of Economic Analysis will revise its third-quarter GDP numbers, which were earlier estimated to have grown by 2.5 percent.
Chad Moutray
Chief Economist
National Association of Manufacturers
CHINA PROMISES 'LEVEL PLAYING FIELD' FOR CLEAN ENERGY
Today in Manufacturing
Officials from Beijing said that U.S. companies will be able to compete equally for $1.7 trillion in investments in sustainable energy technology ... continue
UN: CONCENTRATIONS OF GREENHOUSE GASES HIT RECORD
Today in Manufacturing
The World Meteorological Organization says concentrations of carbon dioxide up 39 percent since the start of the industrial era in 1750 ... continue
UPS RAISES RATES FOR 2012
Quick Manufacturing News
UPS has released new published rates for 2012, including a net increase of 4.9% for UPS Ground packages and a net increase of 4.9% on all UPS Air services and U.S.-origin international shipments. Click to continue
U.S.-CHINA TRADE TALKS ACHIEVE 'CONCRETE' RESULTS
Quick Manufacturing News
China pledged to create a 'level playing field' for U.S. companies investing in strategic emerging industries and allow foreign automakers to invest in the green-vehicle market without transferring their technology to Chinese enterprises. Click to continue
UNLEASH THE POWER OF RECOGNITION: CREATE A CARROT CULTURE
SEMINAR - Tuesday, December 6, 2011
Employers Council
Unleash the power of employee recognition! In today’s marketplace, where businesses are only as good as the people who work there, imagine the impact if you could use the almighty Carrot to drive employee engagement and boost the bottom line.
This nationally-renowned recognition training has been thoughtfully crafted to give leaders, managers and supervisors the in-depth skills and confidence needed to successfully implement effective recognition strategies. Using basic principles, elite presenter, Joel Bishop of O.C. Tanner, will enable attendees to incorporate daily recognition techniques. Participants will then master the skills needed to integrate informal, day-to-day recognition into their exchanges and conversations with team members through hands-on exercises, lively role-plays and humorous, interactive discussions. Topics to be covered include:
• The value of recognition to an organization
• How to use day-to-day recognition for greatest effect
• How to appropriately recognize employees
• What to thank employees for and how often to do it
• How to present recognition awards in a powerful way
Participants will also receive a Recognition Toolkit that includes New York Times Bestseller The Carrot Principle™ by Adrian Gostick & Chester Elton, Recognition Training Workbook, and Thank You cards to start appreciating great work.
When: Tuesday, December 6, 2011
Time: 8:00 a.m. - 12:00 noon (check-in and full breakfast buffet from 7:30 - 8:00 AM)
Where: Red Lion Hotel, 161 W 600 S, Salt Lake City, UT
Cost: $129 per Council member; $209 per non-member (includes materials and full breakfast buffet)
Call the Council office or reply to this email with registration information or questions. You can download the registration form at http://ecutah.org/recognition.pdf. Full refund will be given if cancellation is received one week prior to event. Enrollment is limited to available space.
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