Crude oil prices fell after U.S. stockpiles increased and data signaled the recession in the major energy-consuming countries is deepening. A surge in U.S. crude oil inventories indicating a steady drop in consumer demand pushed prices below $43 a barrel in Europe on Friday. Crude-oil supplies rose four times more than forecast to the highest (6.1 million barrel) since August 2007, bringing stocks to the highest seasonal level of the last five years, the Energy Department said yesterday.
Prices are down 6 percent this year and are 52 percent lower than a year ago. Gasoline inventories rose by 6.5 million barrels, three times more than what was expected by analysts, underscoring the decline in demand as U.S. drivers cut back on trips.
In December 2008, average hourly earnings in manufacturing were $17.92, down 0.1 percent from November 2008’s $17.94 (revised), and up 2.9 percent from $17.41 in December 2007.
(BLS/DOL Employment data from “The Employment Situation: December 2008, USDL 09-0004,” released January 9, 2009; next release is February 6, 2009)
http://www.bls.gov/news.release/pdf/empsit.pdf
Manufacturing Wage Rates (Quarterly, Yearly)
The average hourly compensation of all manufacturing workers rose 4.7 percent during the third quarter of 2008 (from the previous quarter, at an annual rate), reflecting increases in hourly compensation of 6.1 percent in durable goods subsector and 2.6 percent gain in nondurable goods manufacturing.
Real hourly compensation for all manufacturing workers declined 1.9 percent in the third quarter of 2008, following declines of 0.5 percent in the first quarter and 2.7 percent in the second quarters of 2008.
In 2007, hourly compensation of all manufacturing workers grew 3.5 percent, compared to a 4.1 percent increase in 2006. Real hourly compensation in the total manufacturing sector rose 0.7 percent in 2007 after increasing by 0.8 percent in 2006.
In the third quarter of 2008, manufacturing profits rose 26.8 percent, or $57.7 billion (at an annual rate), to $272.6 billion from $214.9 billion in the second quarter. Compared with third quarter profits of 2007, manufacturing profits were down $34 billion in the third quarter of 2008. Manufacturing profits in 2007 were $12.3 billion above manufacturing profits in 2006.
Third quarter 2008 profits estimates for all non-financial industries (manufacturing being a subcategory) advanced 9.1 percent from the second quarter of 2008 to $915.6 billion.
In November 2008, manufacturing employment decreased 149,000 to 13.0 million from November’s (revised) manufacturing employment levels, the largest over-the-month decline since August 2001. Factory job losses totaled 791,000 in 2008.
In December, declines were widespread among the component industries. Within durable goods manufacturing, job losses occurred in Fabricated metal products (-28,300), Motor vehicles and parts (-21,400), Machinery (-6,900), Furniture and related products (-9,300), Primary metals (-6,700), Wood products (-11,800), and Computer and electronic products (-8,200), among others.
In the nondurable goods component, the job losses occurred in Plastics and rubber products (-7,400), Food manufacturing (-8,300), Textile mills (-2,900), Printing and related support activities (-6,400), and Paper and paper products (-2,800), among others.
The manufacturing employment of 13.0 million workers represents 9.6 percent of total non-farm employment.
(BLS/DOL Employment data from “The Employment Situation: December 2008, USDL 09-0004,” released January 9, 2009; next release is February 6, 2009)
http://www.bls.gov/news.release/pdf/empsit.pdf
In December 2009, manufacturing output fell 2.3 percent, a 9.9 percent decline from the level a year ago.
The index for durable goods industries decreased 2.6 percent in December with declines widespread among its components. Only the index for Aerospace and miscellaneous transportation equipment moved up (9.6 percent). The jump in this index reflected the further recovery of output from the strike in commercial aircraft.
The production of nondurable goods moved down 2.1 percent in December after a loss of 2.2 percent in November. The declines were recorded in all the major nondurable goods indexes. The largest decline was seen in Textile and product mills which fell 3.4 percent. Other industries with declines of at least 2 percent included Food, beverage, and tobacco products (-2.0 percent), Plastics and rubber products (-2.7 percent), Paper (-2.1 percent), Chemicals (-2.6 percent) and Printing and support (-2.8 percent).
The index for other manufacturing industries (non-NAICS), which consist of publishing and logging, decreased 2.1 percent in December.
In December 2008, manufacturing industries (NAICS based) operated at 70.1 percent of capacity, 9.4 percentage points below their 1972-2007 average of 79.5 percent and 1.7 percentage points lower than their revised capacity utilization in November 2008.
In durable manufacturing, capacity utilization decreased 1.9 percentage points in December from November (revised) to 65.9 percent. Capacity utilization declined in Nonmetallic mineral products (-0.7 percent); Primary metals (-6.0 percent); Wood products (-2.9 percent); Motor vehicles and parts (-4.1 percent); Electrical equipment, appliances, and components (-2.7 percent); Furniture and related products (-1.7 percent); Machinery (-2.1 percent); Computer and electronic products (-2.4 percent), among others. Capacity utilization increased in Aerospace and miscellaneous transportation equipment (6.6 percent).
Capacity utilization in non-durable manufacturing in December moved down 1.6 percentage points from November 2008 (revised) to 74.7 percent. Decreased capacity utilization was registered in Food, beverage, and tobacco products (-1.6 percent), Chemical (-1.9 percent); Plastics and rubber products (-2.1 percent); Printing and support (-2.0 percent), Paper (-1.6 percent); and Textile and product mills (-1.9 percent).
Manufacturing productivity fell 2.7 percent (seasonally adjusted annual rate) in the third quarter of 2008, as output decreased 7.8 percent and hours of all persons declined 5.3 percent. This is the largest quarterly drop in productivity in the entire series, since the second quarter of 1987. The decline in output was the largest since the first quarter of 1991, when output fell 8.0 percent.
The third-quarter decline in manufacturing productivity was driven by a 10.2 percent decline in nondurable goods productivity, the largest in the series. Nondurable goods output fell by 9.8 percent, while hours in nondurable manufacturing rose 0.4 percent.
In durable goods industries, output per hour grew 2.9 percent in the third quarter of 2008 from the previous quarter, as output and hours decreased by 5.8 percent and 8.4 percent, respectively.
In total manufacturing, productivity increased 0.6 percent from the third quarter of 2007 to the third quarter of 2008.
The trend of strong productivity growth has resulted in the decline in manufacturing employment.
Year to date November 2008, U.S. manufactured goods exports accounted for 61.0 percent of all U.S. exports of goods and services, compared with 62.3 percent a year ago. During that same period, manufactured goods exports were up 11.7 percent above year ago levels, while imports were up 2.8 percent. The trade deficit in manufactures improved to $462.8 billion (annual basis) for 2008, down from $537.7 billion a year ago.
In November 2008, shipments of manufactured durable goods decreased $5.3 billion or 2.6 percent to $195.9 billion, down four consecutive months. This followed a 3.4 percent October decline.
Transportation equipment had the largest decrease, down $1.7 billion or 3.5 percent, to $46.4 billion. Shipments also decreased in Primary metals (-7.6 percent); Computer and electronic products (-4.2 percent); Electrical equipment, appliances and components (-6.5 percent); and Fabricated metal products (-0.2 percent). Shipments increased in Machinery (2.0 percent).
(Census Bureau/DOC data from “Manufacturers’ Shipments, Inventories and Orders (M3-1 (08)-11, CB08-190),” released December 24, 2008; next release is January 29, 2009)
http://www.census.gov/indicator/www/m3/adv/pdf/durgd.pdf
In December 2008, the Producer Price Index (PPI) for finished goods, except foods and energy, increased 0.2 percent, after edging up 0.1 percent in November.
The index for finished energy goods fell 9.3 percent in December after decreasing 11.2 percent in November. Prices for liquefied petroleum gas moved down 21.8 percent in December following a 33.4 percent drop a month earlier. The index for residential natural gas also declined less than it had in November. Gasoline prices decreased 25.7 percent for the second consecutive month.
By contrast, prices for residential electric power increased 0.3 percent compared with a 1.4 percent advance in November, partially offsetting the declines in petroleum and natural gas-based finished energy goods.
In December 2008, the ISM index (PMI) of manufacturing registered 32.4 percent, 3.8 percentage points lower than the 36.2 percent reported in November.
When comparing December to November, the PMI indicates a continuing rapid rate of contraction in manufacturing. An index above 50 percent indicates that the manufacturing economy is generally expanding; an index below 50 percent indicates that it is generally contracting.
Economic activity in the manufacturing sector failed to grow in December for the fifth consecutive month, and the overall economy contracted for the third consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“Manufacturing activity continued to decline at a rapid rate during the month of December. The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time. New orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948,” says Norbert J. Ore, C.P.M., chair of the manufacturing business survey committee.
The changes in the components of the PMI in December were: New Orders down 5.2 percent, Production down 6.0 percent, Employment down 4.3 percent, Supplier Deliveries down 3.5 percent, and Inventories down 0.3 percent.
U.S. Industries Reporting Growth in December 2008
None of the industries in the sector reported growth in December 2008.
Prepared by
Office of Competition and Economic Analysis
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-3699
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