Jan 30, 2015

By Bill Koenig, Manufacturing Engineering Economic sentiment among US manufacturers improved during 2014’s fourth quarter, according to a report issued today by PricewaterhouseCoopers. PwC’s Manufacturing Barometer indicated that multiple indicators reflected improvement during 2014’s final three months, the consulting firm said in a statement. Optimism about the US economy over the next 12 months rose to 68% in the fourth quarter. That’s better than the 57% figure in the year’s third quarter, and matched the 68% for the fourth quarter of 2013. Optimism concerning the world economy improved to 38% from 30%. However, the fourth quarter figure was still down from 47% in 2013’s fourth quarter. The improvement in the confidence of manufacturers is “leading to increased plans for hiring and operational spending,” Bobby Bono, PwC’s US industrial manufacturing leader, said in the statement. “Management teams are primarily focusing on hiring skilled workers, developing new products and investing in research and development.” Among the highlights of the survey: Hiring plans: 60% of manufacturing executives surveyed plan to hire over the next 12 months, up from 52% in the third quarter and 48% in the second quarter. The 60% figure matches 2013’s final quarter. Revenue growth: 85% expect revenue growth, down from 86% in the third quarter and matching 2013’s fourth quarter. Investments: 43% are planning major investments, an improvement from 36% in the third quarter and matching the year-earlier period. At the same time, the amount invested is likely to be reduced. Executives responding to the survey said the investments would be 3.3% of sales, down from 5.7% in the third quarter and 4.8% from the last quarter of 2013. “Management teams appear to be shifting from capital spending to investing in people and products,” Bono said. “However, they have continued to highlight concerns regarding the lack of qualified workers, especially in skilled labor.” According to the report, 64% of respondents said they need to fill skill gaps. Concerning where the skill gaps exist, 75% said skilled labor, and 41% said middle management. Asked about hiring needs, 62% identified “engineering/design,” 44% manufacturing and 28% research and development. The manufacturing barometer is based on a survey of 60 executives at large US-based manufacturers. The interviews took place Sept....

By: Martin Crutsinger, The Associated Press The U.S. trade deficit widened in August from July because exports fell to the lowest level in six months. The wider deficit likely dragged on already-weak economic growth. The deficit grew 4.1 percent to $44.2 billion in August, the biggest gap since May, the Commerce Department said Thursday. Exports dropped 1 percent to $181.3 billion. Demand for American-made cars and farm goods declined. Imports edged down a slight 0.1 percent to $225.5 billion. Purchases of foreign-made autos, aircraft and heavy machinery fell. The cost of oil imports rose sharply. A wider trade deficit acts as a drag on growth. It typically means the U.S. is earning less on overseas sales of American-produced goods while spending more on foreign products. Trade contributed to the tepid 1.3 percent annual growth rate in the April-June quarter. But Steven Wood, chief economist at Insight Economics, predicts that trade will not help economic growth in the July-September quarter and that the weaker exports could actually detract from it. Most economists don’t expect the economy to grow much more than 2 percent for the rest of the year. The trade deficit is running at an annual rate of $561.6 billion, up slightly from last year’s $559.9 billion imbalance. American manufacturers have been hampered by slumping economies in Europe, China and other key export markets. Many European countries are recession. The region accounts for about one-fifth of U.S. exports. For August, the deficit with China dipped 2.3 percent to $28.7 billion. U.S. exports edged up modestly, while imports from China fell. For the year, the U.S. deficit is on track to surpass last year’s record, the highest ever recorded with a single country. The widening trade gap with China has heightened trade tensions between the two countries. And it has become a flash point in the presidential race. GOP challenger Mitt Romney has promised a tougher approach than President Barack Obama with trade practices that he says are giving China unfair advantages. The deficit with the European Union fell 2 percent in August to $11.7 billion. U.S. exports to the region outpaced imports. However, economists expect U.S. sales to Europe to weaken in coming months....

By: National Association of Manufacturers Today more than 200 manufacturing companies participated in the first annual Manufacturing Day, a national event to highlight the importance of manufacturing to the U.S. economy and showcase the rewarding, highly skilled jobs available in manufacturing fields. The National Association of Manufacturers (NAM) and the Manufacturing Institute, along with the Fabricators & Manufacturers Association, International and the U.S. Commerce Department’s Hollings Manufacturing Extension Partnership, are co-producers of the event. Manufacturers across the nation opened their doors to the public to host open houses, public tours, career workshops and other events. A recent study shows that 600,000 manufacturing jobs are unfilled in the United States due to a gap in the job requirements and the skills within the workforce. Manufacturing Day draws attention to the opportunities that a career in manufacturing can provide and promotes the pursuit of skills that will lead to a long-term career that offers security and growth for qualified candidates. “Manufacturing is at the forefront of the national conversation, and Manufacturing Day showcases how important the sector is for economic growth and job creation,” said NAM President and CEO Jay Timmons. “By opening up shopfloors around the country, we were able to show what manufacturing is all about—a high-skilled, technology-driven industry that offers secure, good-paying jobs.” “Access to talented individuals with a high-quality education and advanced skills is critical to manufacturers’ capacity for innovation and business success,” added Jennifer McNelly, president of the Manufacturing Institute. “Today’s talent does not view manufacturing as a top career option. This perception issue, coupled with the skills gap, has contributed to a depleted supply of qualified talent for today’s manufacturing workplaces. Manufacturing Day is an important step in helping to change manufacturing’s image and engaging future talent by giving them firsthand experience with the real world of...

By: Michele Nash-Hoff, Can American Manufacturing Be Saved On August 23rd, the Economic Policy Institute released a briefing paper, “The China Toll ─ Growing U.S. trade deficit with China cost more than 2.7 million jobs between 2001 and 2011, with job losses in every state, written by Robert Scott. “Between 2001 and 2011, the trade deficit with China eliminated or displaced more than 2.7 million U.S. jobs, over 2.1 million of which (76.9 percent) were in manufacturing. These lost manufacturing jobs account for more than half of all U.S. manufacturing jobs lost or displaced between 2001 and 2011.” The growing trade deficit with China has been a prime contributor to the crisis in U.S. manufacturing employment. When you take into account the multiplier effect of manufacturing jobs creating 3-4 other jobs, this explains why we have had a virtually jobless recovery since the end of the recession and why the unemployment rate has stayed so high for so long. The growing trade deficit between China and the United States since China entered the World Trade Organization in 2001 has had a disastrous effect on U.S. workers and the domestic economy. It has cost jobs in all 50 states, as well as the District of Columbia and Puerto Rico. “A major cause of the rapidly growing U.S. trade deficit with China is currency manipulation. Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar.Instead, China has tightly pegged its currency to the U.S. dollar at a rate that encourages a large bilateral trade surplus with the United States.” China’s currency should have increased in value as its productivity increased, which would have created balanced trade. But, the yuan has remained artificially low as China acquired dollars and other foreign exchange reserves to further depress the value of its own currency. The paper explains “To depress the value of its own currency, a government can sell its own currency and buy government securities such as U.S. Treasury bills, which increases its foreign reserves.” As a result of pressure for action on China’s currency manipulation, the Ryan-Murphy Currency Reform for Fair Trade Act (H.R. 2378) was approved by the House of Representatives on September...

By: Mark Shortt, Design-2-Part Many issues are at stake as the 2012 U.S. Presidential election approaches. Both candidates for President–the incumbent Pres. Barack Obama and the presumptive Republican nominee Mitt Romney–know that a healthy and growing U.S. manufacturing sector is vital to the success of the U.S. economy. But only time will tell whose leadership will better enable American manufacturers to thrive. No matter whom you’re supporting, the election will help set the stage for a good deal of political confrontation and, perhaps, compromise on many important policy issues over the next four years. For manufacturers, the question is not so much “Who will win the election?” as it is “Will manufacturing win?” The answer will depend not just on who’s elected President, but on the composition of the House of Representatives and the Senate. Most important, it will hinge on how well the two houses can work together to craft policies that will support manufacturers by lightening corporate tax burdens (especially for companies that are bringing manufacturing operations back to the U.S.), increasing the available pool of qualified workers, strengthening our nation’s resources for research, development, and innovation, and eliminating unfair international trade practices. But in order for manufacturing to win, both houses of Congress will need to work together more effectively to enact legislation that has been shown to have wide public support. An example is H.R. 639, the Currency Reform for Fair Trade Act, a bipartisan bill that would “crack down on Chinese currency manipulation by giving the United States the power to respond appropriately to unfairly subsidized exports from countries,” such as China, according to a statement released last September by the office of Senator Sherrod Brown (D-OH), who co-authored the Senate version of the bill with Senator Olympia Snowe (R-ME). The bill seeks to “amend title VII of the Tariff Act of 1930 to clarify that countervailing duties may be imposed to address subsidies relating to a fundamentally undervalued currency of any foreign country.” The bad news is that the bill, which has languished in the House since being introduced in February 2011, has only a “2% chance of being enacte,” according to GovTrack.us, an online tool for following legislation...