November 28, 2011

November 28, 2011


There continues to be a split between domestic manufacturing activity and other economic variables. Much of the talk last week centered on the failure of the so-called Super Committee to tackle the nation's fiscal deficit challenges and Europe's continued financial problems. Rising borrowing costs are pushing many European nations – including some which were once considered "safe" – to grapple with credit and financial issues. Meanwhile, U.S. policymakers must once again attempt to deal with our soaring debt in the midst of a political stalemate and the threat of large cuts to federal spending on the horizon. Both of them will provide significant headwinds to economic growth in the coming months.

The Bureau of Economic Analysis downgraded third-quarter growth from 2.5 percent, as estimated a few weeks ago, to 2.0 percent. The consumer continued to be the largest driver of this growth; however, spending was less than originally estimated. There were also downward revisions for business inventories and investment. Over the course of the last year, the U.S. economy has grown 1.5 percent, which is well below where it should be at this point in the recovery. Nonetheless, the outlook for 2012 is somewhat brighter, with the National Association for Business Economics estimating 2.4 percent growth next year in its most recent survey.

The National Activity Index from the Chicago Fed noted upgrades in many economic indicators – including manufacturing – which have helped to reduce the risk of recession. This observation was based on better-than-expected recent industrial production numbers. In addition, manufacturing activity picked up around the country. The Richmond Federal Reserve Bank's latest survey showed that production has stopped contracting. Moreover, respondents are very optimistic about new orders, shipments, capital expenditures and employment moving into 2012. The Kanas City Fed's survey echoed the upbeat expectations regarding the next six months even as its current numbers indicate slower growth than last month.

Personal income rose at its fastest pace since March, helping to boost the savings rate to 3.5 percent. Spending also grew, albeit at a slower rate than in September, and the University of Michigan observed greater consumer confidence in current and future economic expectations. Rounding out the better news, existing homes sales picked up and most states reported lower unemployment in October. Weaknesses still persist in housing and employment, and it is safe to assume that consumers are cautiously optimistic moving forward.

This week, we will hope to see more improvements in manufacturing employment and production. The Institute for Supply Management will release its purchasing managers' index on Thursday, and the government will detail November employment conditions on Friday. New productivity data should also confirm the tremendous gains made by manufacturers recently. In addition, regional production information from Chicago and Dallas will foreshadow the Federal Reserve Board's Beige Book release on Wednesday.

Chad Moutray
Chief Economist
National Association of Manufacturers

THE DILEMMA OF RECURRING PROBLEMS

Today in Manufacturing
Nightmare scenario: The phone rings and you learn with dread that the problem you thought you had gotten rid of a month ago is back and bigger than ever ... continue

DURABLE GOODS ORDERS DECLINE IN OCTOBER
Bloomberg News
"Orders for durable goods fell in October as demand for aircraft and business equipment cooled, indicating a slowing global economy may temper purchases of US manufactured goods. Bookings for equipment meant to last at least three years declined 0.7 percent, less than forecast, after a 1.5 percent drop the prior month that was more than twice as large as originally reported," according to data released by the Commerce Department.

WINTER DRIVING SAFETY TIPS
by Greg Summerhays—Workers Compensation Fund
Take a few minutes to cover a few basics:
- Get an earlier than usual start and plan for the trip to take longer than normal.
- Clear your entire vehicle of snow. Snow left on the roof and hood can easily end up
on the windshield or rear window, obstructing your view.
- Clear ice off all windows and side mirrors. Clearing just a peephole will get you out of
the driveway faster, but will also obstruct your line of vision.
- Remove snow from your shoes before you get in the car to avoid fogging up the
windows and creating slippery gas and brake pedals.
- Always use your seatbelt and insist any passengers do so as well.

On the Road:
- Slow down. Posted speed limits are meant for ideal (i.e., dry) conditions; adjust your
speed down during slick weather. This is even true for four-wheel drive vehicles.
- Don't talk on your cell phone while driving.
- Leave extra space between you and the vehicle in front of you in case of sudden
stops, black ice, etc. If the vehicle behind is following too closely, change lanes or try
slowing down so they will pass you.
- Try not to make sudden stops or direction changes, such as going across three lanes
of traffic to make that last minute exit.
- Keep your headlights on.
- Pay attention to other drivers and anticipate what they may do. Watch for cars on side
streets that are trying to pull out into traffic.
- Slow down while approaching intersections.
- Keep clear of snowplows, big rigs and other large vehicles, which can suddenly blind
you with snow spray. Never pass a snowplow on the right.
- Do not use cruise control in cold or wet weather. Tapping on your brakes to
disengage can cause you to slip and slide.
- Be alert for ice, especially on bridges and in shaded areas.
- During especially hazardous and treacherous conditions, don't try to drive out of the
storm; seek shelter until the worst passes.

Braking & Skidding:
- At the first sign of brake lights, start slowing down. Try to avoid slamming on the
brakes.
- If you have anti-lock brakes, do not pump them. Keep constant, firm pressure on the
brake pedal until the vehicle comes to a complete stop.
- If you start to skid, take your foot off the pedal and steer in the direction you want to
the vehicle to go. Do not hit the brakes or accelerate.

Chains:
- If highways signs say chains are required you must either stop and put them on, or
turn back.
- Pull completely out of traffic to put on and take off chains. Stopping in a traffic lane not only blocks traffic, it greatly endangers your physical safety.

What to Do if Stranded:
- If your vehicle breaks down, or is stalled or stranded, don't panic.
- Turn on the emergency flashers or set up flares.
- If you're stuck, try straightening the wheels and accelerating slowly. Don't let the tires
spin endlessly; it only helps create a mess. (Consult your owner's manual for the best way to get the vehicle unstuck.)
- Turn the car on occasionally to keep warm. If it is snowing, check the tailpipe every so
often to ensure it is not covered with snow. You may also want to crack a window
slightly to avoid potential carbon monoxide build up.
- Move around once in a while to keep your circulation up.
- If it is snowing or raining, stay with your vehicle unless help is within 100 yards.

Know the Conditions:
Winter weather can change fast and unexpectedly. For the latest updates on road conditions around Utah 24-hours a day:
• Call 511 in Utah,
• Call 866-511-UTAH (8824) outside Utah, or
• Visit http://www.commuterlink.utah.gov/

Greg Summerhays is Director of Public Relations and Community Outreach at Workers Compensation Fund. WCF offers ongoing safety training and UMA members are eligible for a 5% premium discount through a partnership with WCF. Visit www.wcfgroup.com for more information.

COOK COUNTY SUFFERS MANUFACTURING JOBS LOSS
Chicago Sun-Times
According to the Chicago Sun-Times "Cook County lost more than a quarter of its manufacturing jobs between 2000 and 2010, according to a new analysis. Cook lost some 89,100 jobs, more than any other county in the United States except for Los Angeles County, which saw 113,000 jobs disappear." Industrial experts agree US "manufacturing has suffered a toxic mix of recession, ferocious global competition and rising production costs. Some also lay blame on higher taxes and too much government regulation." Chad Moutray, chief economist for the National Association of Manufacturers, said, "Manufacturing combined with construction accounted for the bulk of the jobs that we lost in the recession."

CHINA AIMS TO BECOME AN INNOVATION POWERHOUSE BY 2020
SmartBrief on Leadership
China's leaders want to turn their country into an innovation leader by 2020, but they could have their work cut out for them, says Richard Li-Hua. The country's educational system is based on rote learning rather than critical thinking, and a lack of intellectual-property protection stifles corporate innovation. "The Chinese tradition of deferring to authority is not conducive to innovation either," Li-Hua says. InnovationManagement.se (Sweden)

EUROPE LAUNCHES U.S. BIO-ETHANOL ANTI-DUMPING PROBE
Quick Manufacturing News
If the complaint is upheld, the European Union could decide to impose import duties on U.S. bio-ethanol, as it has done with U.S. and Canadian biodiesel. Click to continue