It would be easy to get confused by last week’s economic reports, as they appear to be moving in different directions. Equity markets around the world continue to react to developments in Europe, with a possible Greek exit from the euro and signs of slow growth across the continent. The impacts on the global economy are obvious, with manufacturers in the United States experiencing dampened demand for their goods. Adding to this uncertainty are worries about Washington’s inaction on end-of-year tax policies. The Congressional Budget Office added fuel to this discussion when it announced that the country risks a recession in early 2013 if the “fiscal cliff” is not dealt with.
It is against this backdrop that manufacturing activity appears to be improving in some areas, even as other areas show weakness. New durable goods orders rose 0.2 percent in April, primarily due to strong sales for non-defense aircraft and motor vehicles. On the surface, this is good news. Yet, most of the major industries suffered losses in new orders and shipments in April, reflecting a slowdown in growth. The Richmond Federal Reserve Bank’s Manufacturing Survey seemed to reach a similar conclusion, with various production measures essentially unchanged from the prior month.
The Kansas City Fed, however, observed the opposite. After manufacturing activity slowed in March and April, respondents noted definite improvements in May. New orders and production were higher, and most importantly, predictions about growth in the second half of 2012 remain upbeat. Manufacturers in Richmond were also more optimistic about the future than their current assessments. The most recent Consumer Confidence Survey from the University of Michigan and Thomson Reuters showed increased confidence, and economists from the National Association for Business Economists (NABE) increased their forecasts for industrial production and employment growth for the rest of this year. Both are positive signs.
This week’s data releases should add more clarity to the overall economic outlook. On Friday, we will have two closely watched data points. The Bureau of Labor Statistics (BLS) will release May employment numbers, which are expected to show modest improvements over March and April. Manufacturing has played an important role in net job creation, with 167,000 additional workers added since November. In addition, the Institute for Supply Management (ISM) will announce new Purchasing Managers Index data. Given recent weaknesses, both of these figures might reflect some easing for manufacturing employment and production.
Chad Moutray
Chief Economist
National Association of Manufacturers
Chief Economist
National Association of Manufacturers
THIS WEEK IN WASHINGTON
National Association of Manufacturers
Congressional
Leaders to Headline NAM Manufacturing Summit. Every manufacturer
in the United States has a compelling story to tell about how Washington’s
policies affect manufacturing. Whether it is how energy regulations cost
manufacturers vital capital, how tax increases constrain productivity or how
skills gaps in the workforce make filling manufacturing jobs difficult, you
have a story that sheds light on the struggles that manufacturers in the
United States experience every day. Join your peers and share your stories
with members of Congress at the upcoming NAM Manufacturing Summit,
June 6–7, at the Hyatt Regency Hotel in Washington, D.C.
House Majority Whip Kevin McCarthy (R-CA) and Minority
Whip Steny Hoyer (D-MD) will headline the event with a keynote breakfast
address at the Hyatt on Thursday, June 7. They will share their own unique
perspectives on the future of manufacturing in the United States and how
manufacturing is vital to our nation’s economic recovery. More importantly,
they will also have the opportunity to hear from you on this year’s three key
Summit themes: energy regulations, tax policy and skills gap workforce
issues. These roadblocks starve growth and prosperity in the manufacturing
sector, prevent the United States from competing on a level playing field in
the global market and let many manufacturing jobs go unfulfilled. That’s why
we need you to tell your story.
During this two-day, action-packed fly-in, you’ll hear from other key leaders in Washington on important issues; receive best practices for communicating with elected officials; network with other manufacturers from across the nation; and meet face-to-face with high-level Administration and legislative officials on Capitol Hill to tell your story and explain your challenges. Each manufacturer will have the opportunity to emphasize the need for policies that will spur vigorous economic growth and reduce the cost of doing business—policies outlined in the NAM’s A Manufacturing Renaissance—Four Goals for Economic Growth. “You have the solutions that will put Americans to work and strengthen our economy,” said NAM President and CEO Jay Timmons in a video message to manufacturers. “Manufacturing means jobs, and it’s time for Washington to enact policies that let manufacturers create even more jobs to power our economy.”
For more information on the Summit, visit www.nam.org/summit.
To register for the full Summit or individual Summit events, including
the breakfast with House Leaders McCarthy and Hoyer, please click here.
Click here to
follow the NAM’s Twitter feed, and look for the hashtag #namsummit for
up-to-the-minute details. If you have any questions about the NAM’sManufacturing
Summit, please contact Candice Daniels Austin, the NAM’s director of
public affairs, at caustin@nam.org or
(202) 637-3122.
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Lockheed Martin, SAIC
and Raytheon Headline NAM Cyber Risk Management Workshop. Join the NAM
and three leading experts on cybersecurity—Lockheed Martin, SAIC and
Raytheon—for a day-long workshop on cyber risk management best practices
inside the aerospace and defense industries. Cyberattacks on corporate assets
and systems are occurring at an alarming rate, and current mitigation
approaches are increasingly ineffective against these threats, yielding
little real risk reduction. Learn how leading organizations manage cyber
risks from key senior executive stakeholders. Space is limited.
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NAM Defends
Manufacturers Against Oppressive Class Action Suits. On Thursday, May 17,
the NAM filed an amicus brief asking a federal appeals court to
overturn a ruling that allowed a consumer lawsuit to be certified as a class
action. Class actions are problematic for manufacturers because they can
raise the stakes in a case far beyond what the actual damages are. Class
actions are only appropriate when a large number of plaintiffs all have the
same claims. In this case, the NAM argued that trial judges should make every
effort to ensure that all the plaintiffs actually do. The appeals court
certified the case as a class action, despite there being 21 different
product designs at issue and countless different circumstances for each user.
We are supporting further review of this problematic ruling. See Glazer
v. Whirlpool Corp. (6th Cir.).
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NAM President and CEO Jay Timmons met with House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) on Thursday, May 17, to discuss regulations and their cost impacts on small, medium-sized and large manufacturers.
Photo by Dave Bohrer
Timmons Says Current
Policies Hinder Manufacturing Growth. On Monday, May 21, NAM President
and CEO Jay Timmons spoke at the Metals Service Center Institute
(MSCI)/American Iron and Steel Institute in Cambridge, Md., on tax reform,
regulations and the Keystone XL pipeline. Timmons said that manufacturing
faces headwinds mostly created by gridlock in Washington. “For manufacturers,
addressing our challenges is not about politics; it’s about policy.
Unfortunately, advancing good policy has not been easy the past few years.
It’s been hard to advance any policy,” said Timmons. Politico Influence
published a story on the speech and the full remarks are available here.
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AP: WHERE
OBAMA, ROMNEY STAND ON MANUFACTURING
Today in Manufacturing
Today in Manufacturing
Both candidates say they will reduce the corporate tax rates
to varying degrees and want to permanently extend the R&D tax credit
… continue
CHINA
CHALLENGES U.S. TRADE PENALTIES
Today in Manufacturing
Today in Manufacturing
China filed WTO cases challenging U.S. anti-subsidy tariffs
on 22 Chinese goods including steel, widening a conflict between the two
trading partners … continue
Quick Manufacturing
News
HSBC blames worsening conditions in the export sector for
continued drop in factory output.
THE COST GAP: RESHORING OF CHINESE MANUFACTURING JOBS
Today in Manufacturing
Today in Manufacturing
The total landed cost gap between the two nations continues
to shrink, driven in part by rising wage inflation in China and continued
productivity improvements in the U.S. ... continue
Jay Timmons - NAM
According to Jay Timmons President and CEO at the National
Association of Manufactuers, "Manufacturers Push Skills Certificate As
Good Jobs Go Unfilled. The US unemployment rate remains above 8 percent, and
every politician extols the importance of job creation. Yet each month
thousands of manufacturing jobs are there for the taking – but companies are
unable to hire sufficiently skilled workers." Timmons continued,
"Five percent of manufacturing jobs go unfilled every day because we can't
find the skilled workforce. At any given time, this skills gap represents about
600,000 open jobs. Last year, the Manufacturing Institute's Manufacturing
Skills Certification System yielded almost 85,000 of the portable certificates
that the group hopes to have recognized nationwide. That's almost one-fifth of
the goal."
EU GROUP:
COMPANIES MIGHT CUT CHINA INVESTMENT
Today in Manufacturing
Today in Manufacturing
The European Union Chamber of Commerce in China said half of
EU companies say regulatory barriers have limited their business opportunities
and hurt profits … continue
Quick Manufacturing News
The
Equipment Leasing and Finance Association' reported that economic activity
for the $628 billion equipment finance sector, showed overall new business
volume for April was $6.1 billion, up 20% from volume of $5.1 billion in the
same period in 2011. Volume was down 10% from the previous month.
Year-to-date cumulative new business volume is up 17%.
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Quick Manufacturing News
Central
Europe to outperform Eurozone but a slowdown is looming.
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Quick Manufacturing News
Italy,
which has the third-biggest economy in the eurozone, is undergoing deep
reforms to reduce public debt and restructure the economy, and is in
recession.
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