Survey Suggests More Growth Ahead For Midwest Economy

Survey Suggests More Growth Ahead For Midwest Economy

Aug 1, 2017

By The Associated Press A monthly survey of business leaders suggests that business conditions worsened last month but that the economy will pick up over the next few months in nine Midwestern and Plains states, according to a report issued Tuesday. The Mid-America Business Conditions Index dropped to 56.1 in July after reaching 62.3 in June. The May figure was 55.5. “The overall index over the past several months indicates a healthy regional manufacturing economy, and points to solid growth for both manufacturing and nonmanufacturing for the second half of 2017,” said Creighton University economist Ernie Goss, who oversees the survey. The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth in that factor, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. Economic optimism remained strong despite a decline in July’s number: to 60.2 from 67.5 in June. “Strong profit growth, still-low interest rates, and international sales boosted the economic outlook among supply managers in the nine-state region,” Goss said. The July employment index remained above growth neutral, despite slipping to 56.5 last month from 60.7 in June. “With the recent boost in employment growth, total regional employment growth (year over year) is now 1.4 percent, and slightly below the nation’s 1.6 percent gain over the same time period,” he said. On the trade front, the regional index for new export orders index dipped to 54.3 in July from 56.6 in June, and the import index declined to 50.0 from June’s 56.7. Japan’s recent decision to raise the tariff on frozen beef imports will significantly harm Kansas and Nebraska, according to Goss, because Nebraska ranked No. 1 and Kansas No. 4 in those...

Where Manufacturing Is Thriving In The U.S.

Where Manufacturing Is Thriving In The U.S.

Jun 19, 2017

By Joel Kotkin and Mike Shires, Forbes Throughout the dismal presidential campaign, the plight of America’s manufacturing sector played a central role. Yet despite all the concerns raised about factory jobs leaving the country, all but 18 of the country’s 70 largest metropolitan regions have seen an uptick in industrial employment since 2011. And despite the slowdown in car sales, the job count continues to expand, albeit more slowly. Although the share of industrial jobs has shrunken from 10.5% of all nonfarm employment in 2005 to 8.5% today, manufacturing continues to have an outsized influence on regional economies, as is spelled out in the latest paper from the Center for Opportunity Urbanism. This stems in large part from the industrial sector’s productivity gains since 2001 — almost twice as much as the economy-wide average, according to the Bureau of Labor Statistics — and it has a far higher multiplier effect (the boost it provides to local job and wealth creation) than virtually any other sector. Manufacturing generates $1.40 in economic activity for every dollar put in, according to the U.S. Bureau of Economic Analysis, far greater than the multiplier generated by business services, information, retail trade or finance. To determine the places where manufacturing growth is the strongest, we looked at employment in the sector over time, assessing short-, medium- and long-term trends going back to 2005 and adding in variables for persistence and momentum as well. The results of these trends, based on three-month averages, are normalized and each MSA is assigned a score based on its relative position in each area.  The rankings this year produced some surprising results, as well as some familiar stories. Red States And The Rust Belt Win  Nine of this year’s top 10 regions for manufacturing job growth are in red states, led by top-ranked Louisville-Jefferson County, which straddles the border between Kentucky and Indiana. Since 2011, manufacturing employment in the metropolitan area has expanded 30.2% to a total of 83,300 jobs, led by a resurgent auto industry that accounts for 27,000 jobs in the area. Due to a slowdown in auto sales, the job count may be peaking, but the hub of the Bluegrass State has...

After-Tax U.S. Manufacturing Profits Up 19.9% from Q1 2016…

After-Tax U.S. Manufacturing Profits Up 19.9% from Q1 2016…

Jun 6, 2017

“After-Tax U.S. Manufacturing Profits Up 19.9% from Q1 2016 to Q1 2017” By Terence P. Jeffrey, CNSNews.com The after-tax profits of U.S. manufacturing corporations increased from $118,199,000,000 in the first quarter of 2016 to $141,672,000,000 in the first quarter of 2017, an increase of $23,473,000,000 of about 19.9 percent, according to data released today by the Census Bureau. According to the Census Bureau, this data only counts the after-tax profits on manufacturing done within the United States. It does not count the after-tax profits that a U.S.-based manufacturing corporation may earn from products it makes in foreign countries. After-tax profits of U.S. manufacturing also increased from $131,727,000,000 in the fourth quarter of 2016 to the $141,672,000,000 reported for the first quarter of this year—a climb of $9,945,000,000 or about 7.5 percent from one quarter to the next. “U.S. manufacturing corporations’ first quarter 2017 unadjusted after-tax profits totaled $141.7 billion, up $23.5 billion from the after-tax profits in the first quarter of 2016, and up $9.9 billion from the after-tax profits of $131.7 billion recorded in the fourth quarter of 2016,” the Census Bureau said in the press release for its Quarterly Financial Report on U.S. manufacturing, mining, wholesale trade and selected service industries. In addition to these “unadjusted” numbers, the Census Bureau also publishes “seasonally adjusted” numbers for quarterly manufacturing profits. In the seasonally adjusted numbers, after-tax profits for manufacturing corporations in the first quarter this year were up $24 billion from the first quarter last year, and up $3.5 billion from the fourth quarter of last year. “U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the first quarter of 2017 totaled $146.5 billion, up $3.5 billion from the after-tax profits of $142.9 billion in the fourth quarter of 2016, and up $24.0 billion from the after-tax profits of $122.45 billion recorded in the first quarter of 2016.” Actual sales for U.S. manufacturing corporations were up $94.2 billion from the first quarter of last year, according to the Census—rising from $$1,4881.8 billion in the first quarter of 2016 to $1576.0 billion in the first quarter of 2017....

U.S. Reshored Jobs Rising — But What Will 2017 Bring?

U.S. Reshored Jobs Rising — But What Will 2017 Bring?

Jun 2, 2017

By Taras Berezowsky, Metal Miner Looks like the tide has finally turned. Extending that metaphor is easier now than it’s ever been for us writing on this topic: the reshoring of American manufacturing from abroad — and specifically, the net gains in jobs that we’ve been seeing in 2016 and early 2017 as compared with the trends in the early 2000s. (I envision the emigrating jobs huddled together for warmth on a seaworthy vessel, with Shanghai getting smaller in the distance as the Pacific waves toss the boat ever closer toward Long Beach… if only it were that poetic.) Back to reality. The Reshoring Initiative has just released its 2016 Data Report, and the numbers seem to tell a rosy story. According to the report press release, “in comparison to 2000-2003, when the United States lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000.” “The numbers demonstrate that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector,” the release concluded. But of course, it’s not that easy. Major policy changes will have to be made or improved to continue the reshoring trend (which is still in its early stages), according to Harry Moser, founder of the Reshoring Initiative. In a way, the U.S. should aspire to host conditions like those in Germany, Moser told me, including a supportive government, VAT, low healthcare costs, and an appreciation of the benefit of local sourcing. “Germany has a huge trade surplus and manufacturing at about 20% of employment,” Moser said, “and [the U.S. has] a huge trade deficit and manufacturing at about 10%.” RELATED: We chatted with Moser in a video interview a few years ago when the latest results within the trend were gaining steam (below). The Good News for U.S. Metals Jobs According to the full report, in 2016, fabricated metals had a good showing with the fourth-most reshored jobs by industry category. Also, primary metals moved ahead of non-metallic minerals: Good to see that toys and hobbies industry jobs are coming back… but not nearly as quickly. The “Good/Bad/Who Knows” News for U.S. Metals Jobs One aspect of our new economy that’s...

Manufacturing Growth on Autopilot in May

Manufacturing Growth on Autopilot in May

Jun 1, 2017

By Bill Koenig, AdvancedManufacturing.org Manufacturing economic growth remained on autopilot in May,  the Institute for Supply Management (Tempe, AZ) said today. The institute’s PMI, which measures economic activity in manufacturing, was 54.9% last month, a tick up from April’s 54.8%, according to a monthly report. May was the ninth consecutive month of expansion in manufacturing. New orders, production and employment were all in positive territory last month, the group said. The PMI is “still a very strong number,” Timothy R. Fiore, the new chair of ISM’s Manufacturing Business Survey Committee, said on a conference call. Fifteen of 18 industries reported growth during the month, including machinery, primary metals, miscellaneous manufacturing, transportation equipment, fabricated metal products and petroleum and coal products. Two industries, apparel and textile mills, reported economic contraction. The ISM report is based on a survey of 350 purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. The PMI has averaged 53.9% the past 12 months and 56.1% for the first five months of 2017. The index hasn’t been below 50% since August. ‘Turn of a Dime’ The group’s New Orders Index perked up to 59.5% in May from 57.5% the month before. Fourteen of 18 industries reported increases in orders, including primary metals, machinery, fabricated metal products, petroleum and coal products and transportation equipment. Only apparel reported a decline in orders. The institute’s Production Index cooled to 57.1% in May, down from 58.6% in April. Fourteen of 18 industries reported a boost in output, including primary metals, fabricated metal products, miscellaneous manufacturing, machinery and transportation equipment. ISM’s Employment Index advanced to 53.5% last month, up from 52% in April. Eleven of 18 industries reported job growth, including miscellaneous manufacturing, machinery and petroleum and coal products. Five industries reported job cuts, including fabricated metal products and transportation equipment. Fiore said the production and employment results may be tied together. Some manufacturers are have difficulty “finding qualified people on a turn of a dime,” he said. “Our ability to staff up is impacting the production...