MANUFACTURING UPDATE

- DECEMBER 2013 1. LATEST POLICY

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On Dec. 10, Sen. Stabenow (D-MI) introduced legislation to provide federal matching funds for state programs that help community colleges partner with local businesses provide job training. More: Stabenow issue page

Introduced: New Skills for New Jobs Act

On Nov. 21, Sens. Klobuchar (D-MN) and Hoeven (R-ND) introduced the Innovate America Act—bipartisan legislation to spur innovation and competitiveness. Among other provisions, the legislation funds 100 new Science, Technology, Engineering, and Mathematics (STEM)-focused high schools, puts more computer science teachers in elementary and secondary schools, expands STEM-related undergraduate research opportunities, and helps maintain America’s competitive edge. More: Klobuchar press release | Gillibrand press release

Introduced: Innovate America Act

On Nov. 20, Sen. Schatz (D-HI) introduced a bill that would invest $8 million in the Market Development Cooperator Program (MDCP). The purpose of MDCP awards is to establish partnerships between the International Trade Administration and non-profit industry groups (such as trade associations and local Chambers of Commerce) to work together with small manufacturers to increase exports. It is estimated that $1 of MDCP awards translates in to $258 in exports.

Introduced: American Export Promotion Act of 2013

On Nov. 14, Sens. Durbin (D-IL) and Gillibrand (D-NY) introduced legislation to invest in the next generation of American entrepreneurs and innovators by establishing a national network of fabrication laboratories, known as “fab labs.” Fab labs are small, community-based workshops that give members of the public — from students to small businesses — access to educational resources and high-tech equipment that can design, develop, and create new products. More: Durbin press release | Gillibrand press release

Introduced: National Fab Lab Network Act of 2013

On Nov. 14, Sens. Kirk (R-IL) and Coons (D-DE) introduced the American Manufacturing Competitiveness Act to bolster the competitiveness of the manufacturing industry in the United States. The bill would require the development of a national manufacturing strategy, boosting the traditional and high-tech manufacturers that employ nearly 12 million Americans. More: Kirk press release | Coons press release

Introduced: American Manufacturing Competitiveness Act

2. OTHER NEWS

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Sen. Klobuchar (D-MN), Vice Chair of the U.S. Congress Joint Economic Committee, on Dec. 17 released a new report detailing the revitalization in U.S. manufacturing, showing it has added over 500,000 jobs since February 2010 and exceeded its pre-recession peak for exports, up 38% since 2009. More: JEC press release | JEC report | MJA press release

New congressional report details manufacturing revival

On Dec. 10, Sen. Brown (D-OH) joined with the BlueGreen Alliance, the Institute for America’s Future, and the Center for American Progress, to release a new report offering a strategy for a 21st century green industrial transformation. The report proposes maximizing the national strength of U.S. manufacturing by employing a region focused strategy for clean energy manufacturing. More: BlueGreen Alliance press release | BlueGreen Alliance report

The Green Industrial Revolution and the United States

Manufacturing the future: The next era of global growth and innovation

The McKinsey Global Institute recently released a report examining the global future of manufacturing. The report argues manufacturing increasingly promotes innovation, productivity, and trade more than growth and employment; that manufacturing is made up of five distinct groups of industries; and that increasing global demand is creating both new challenges and new opportunities for manufacturers. More: McKinsey report

High-performance manufacturers: What separates the best from the rest

A new report from Deloitte examines the keys to companies outperforming over time. The report identifies three rules for success. 1) Better before cheaper: Don’t compete on price, compete on value. 2) Revenue before cost: Drive profitability with higher volume and price, not lower cost. 3) There are no other rules: Do whatever you have to in order to remain aligned with the first two rules. More: Deloitte report

The Chicago Fed released a new paper examining the role of community colleges in addressing worker skill gaps within the region. More: Chicago Fed report

Community Colleges and Industry: How Partnerships Address the Skills Gap

3. SECTOR DATA

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Purchasing Managers’ Index (PMI)

November PMI was 57.3, an increase of 0.9 from October’s reading. The PMI is a widely watched measure of aggregate manufacturing strength. PMI is based on a survey that asks purchasing managers if Inventories, Supplier Deliveries, Employment, Production, and New Orders have gone up or down that month. Results above 50 indicate growth. For November, Inventories read 50.5 (-2.0 on October), Supplier Deliveries read 53.2 (-1.5), Employment read 56.5 (+3.3), Production read 62.8 (+2.0), and New Orders read 63.6 (+3.0). This data is in chart form below. December figures will be released on Jan. 2, 2014.
Change on prior month PMI Inventories Supplier deliveries Employment Production New orders 57.3 50.5 53.2 56.5 62.8 63.6 +0.9 -2.0 -1.5 +3.3 +2.0 +3.0

More: ISM press release

Employment

Preliminary estimates by the Bureau of Labor Statistics are that manufacturing employment rose by 27 thousand employees in November, to a seasonally adjusted 12.014 million. This is the fastest monthly growth since March of 2012. The below chart shows the total number of manufacturing employees over the last ten years in millions of workers, as well as the month-on-month change in manufacturing employment over the last six months in thousands. Both numbers are seasonally adjusted.
Manufacturing employees, millions
15 14 13 12 11 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 Month-on-month change, thousands +15 +8 +16 +27 -17 Jun Jul Aug Sep Oct Nov -7

More: BLS data

Fed Data

Six of the twelve Federal Reserve regional branches publish monthly updates on manufacturing conditions in their region. Because each branch uses different questions and methodology, inter-regional comparisons are not suggested. New York Fed (NY state, 12 northern NJ counties, and Fairfield County in CT) “Manufacturing conditions were flat for New York manufacturers. The general business conditions index rose three points but, at 1.0, indicated that activity changed little over the month.” More: NY Fed Philadelphia Fed (eastern PA, southern NJ, and DE) “Manufacturing growth in the region continued in December at a pace similar to that of November. The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, was relatively unchanged from November to December, at 7.0. … The index has now been positive for seven consecutive months." More: Philly Fed Richmond Fed (DC, MD, NC, SC, Virginia & most of WV) “Manufacturing in the Fifth District improved in November. … The composite index of manufacturing strengthened, climbing to a reading of 13 in November following last month’s reading of 1.” More: Richmond Fed

Chicago Fed (southern WI, IA, northern IL, northern IN, and southern MI) “The Chicago Fed Midwest Manufacturing Index (CFMMI) increased 0.4% in October, to a seasonally adjusted level of 97.4.” The CFMMI is based on an index value where 2007 equals 100. More: Chicago Fed Kansas City Fed (western MO, NE, KS, OK, WY, CO & northern NM) “Tenth District manufacturing activity continued to grow, and producers’ expectations for future activity improved moderately.” More: Kansas City Fed Kansas City Fed (TX, northern LA and southern NM) “Growth in Texas factory activity picked up for a third consecutive month in November. … The production index, a key measure of state manufacturing conditions, rose from 13.3 to 16.9, reaching its highest reading in five months.” More: Dallas Fed

4. ABOUT THIS NEWSLETTER

================================== This update is provided by the Office of U.S. Senator Chris Coons on behalf of the Manufacturing Jobs for America initiative. For more information, visit coons.senate.gov/manufacturing or email jj_singh@coons.senate.gov.

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