What are USA’s Top Ten Manufactured Exports?

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We learned with painful social and economic clarity in the great recession of 2008-2009 that it is demand, and not supply, that drives our economy.

So what are the top 10 demanded U.S. manufactured exports?

Transportation Equipment
Chemicals
Machinery
Computer and Electronic Products
Petroleum and Coal Products
Food
Primary Metal
Medical Equipment, Sporting Goods, and Miscellaneous
Fabricated Metal Products
Electrical Equipment

(source: Brookings EXPORT NATION 2012)

Here is what the report had to say about Manufacturing:

“Manufacturing comprised the majority of U.S. exports in 2010. While on a declining trend as a share of U.S. exports, manufacturing has seen a comeback in the first year of recovery. About 61 percent of U.S. exports, manufacturing industries produced three-quarters of the additional U.S. sales abroad between 2009 and 2010. The sector’s sales abroad increased by 14.5 percent and expanded faster than U.S. exports overall. Machinery, transportation equipment, and chemicals delivered one-half of manufacturing exports growth.”

“Manufacturing contributed disproportionately to export recovery in the large metros (metropolitan areas). While manufacturing accounted for 59 percent of the exports sold by industries located in the large metros in 2010, it delivered almost 76 percent of the exports growth in these metros. Midwestern metros illustrated this trend, with 85 percent of their exports growth generated by manufacturing industries.”

“Manufacturing industries delivered the majority of export sales growth in 94 out of the largest 100 metros in 2010.”

Here are the facts on US Manufactured Goods Exports. Where do you fit in?

Precision machining companies produce components that are key to functionality of transportation equipment, machinery, computers and electronic products, medical equipment, and electrical equipment.

Our parts are used to harvest, process, and package food, and to produce and refine petroleum and coal products.

We are a sub-industry of Fabricated Metals- number 9 on the list.

What are USA’s Top 10 Manufactured Exports?

They are all items that would not be exportable if it were not for the role of our precision machined products.

Why does manufacturing – especially precision machined manufacturing- matter?

Ask an economist.

Or look at exports.

Recession photo

Manufacturing Jobs – What You Need (And Want) To Know

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Four of the top five manufacturing sectors by added employment in 2012 were key markets served by precision machining; Transportation Equipment, Motor Vehicles and Parts, Fabricated Metal Products, Machinery.

(The fifth market was Food Manufacturing, and yes, some of our companies make parts for food service too- think blender parts, nozzles and components for food dispensing, preparation and packaging equipment.)

Graph courtesy Chad Moutray, National Association of Manufacturers, NAM.

According to the Bureau of Labor Statistics, the number of Jobs in Manufacturing increased by 180,000 in 2012.

“In December, manufacturing employment rose by 25,000, with small gains in a number of component industries. In 2012, factory employment increased by 180,000; most of the growth occurred during the first quarter.”

“In December, the average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.5 hours. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours.”

While there are signs that manufacturing employment gains have slowed down in the second half, those were connected to the economic uncertainties tied to the Presidential Election, Fiscal Cliff, and Global Economic Slowdown. Two of these three special causes are now behind us.

As the graph above shows, Manufacturing is the place to look for employment gains.

The softness in manufacturing employment in the last half of 2012 belies the demand that our industry will have for talented workers going forward. As the BLS workweek hours indicate, Manufacturing currently is using overtime to meet its needs. Given demographic trends, current lean staffing, and the push to reshore production, any economic upturn at all will be strongly bullish for employment prospects in Manufacturing in 2013.

Improvements in Housing Markets are already visible and a 15+ million auto sales forecast are two indicators that suggest if you want to find a well paying job in 2013, Precision Machining (Advanced Manufacturing) is a great place to apply.

For information about careers in Precision Machining, check out our Career Resources Page on the PMPA Website.

Find a training program near you using PMPA’s Comprehensive Jobs Training Database.

I continue to speak with instructors, counselors, and officials at local community colleges across the country. They are unanimous in saying that their machining students “have multiple job offers before they graduate.”

December ISM Manufacturing Report- Mixed Message

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The December ISM Manufacturing Report is out, and the headline story is good news.

But the full report is a bit of a mixed bag for our industry.

Manufacturing is back in expansion mode as the Purchasing Manager’s Index, “‘The PMI™,’ registered 50.7 percent, an increase of 1.2 percentage points from November’s reading of 49.5 percent, indicating expansion in manufacturing for only the third time in the last seven months. This month’s PMI™ reading moved manufacturing off its low point for 2012 in November.” – ISM Report Dec 2012

ISMDec2012

A closer reading however notes that “The nine industries reporting contraction in December — listed in order — are: Nonmetallic Mineral Products; Chemical Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Fabricated Metal Products; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; and Apparel, Leather & Allied Products.” – ISM Report Dec 2012

Precision machining is an industry of Fabricated Metal Products. Four of our most important market segments were also in decline in December: Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components. The market we see is not as rosy as the headline.

In addition, the New Orders component of the survey, at 50.3, went unchanged. This suggests that new orders, the source of our business’s future production, was virtually unchanged in December. The backlog of orders component, at 48.5,indicates a small contraction of the orders book.

Graph courtesy of Calculated Risk Blog

September PMI Report- Fragile Economy and Soft Order Book

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“The PMI™ registered 51.7 percent, an increase of 0.2 percentage point from September’s reading of 51.5 percent, indicating growth in manufacturing at a slightly faster rate.”

ISMMfgNov2012 — Underperforming at best. We have the tools…

“The New Orders Index registered 54.2 percent, an increase of 1.9 percentage points from September, indicating growth in new orders for the second consecutive month.”

September 2012 business trends — Why we’re not exactly ecstatic over October’s 1.9% increase in new orders- Look at our shipments for the month September…

“The Production Index registered 52.4 percent, an increase of 2.9 percentage points, indicating growth in production following two months of contraction. The Employment Index registered 52.1 percent, a decrease of 2.6 percentage points, and the Prices Index registered 55 percent, reflecting a decrease of 3 percentage points.”

“Comments from the panel this month reflect continued concern over a fragile global economy and soft orders across several manufacturing sectors.” (emphasis mine)

fuzzy_slippers — “Order book is really soft,” according to my industry contacts. I won’t say who said “As soft as a pair of fuzzy slippers.”

According to the ISM release, the following manufacturing sectors- listed in order reported declines in October: Primary Metals; Wood Products; Machinery; Fabricated Metal Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Computer & Electronic Products; and Nonmetallic Mineral Products.

The precision machined products industry is a sub sector of Fabricated Metals, and we directly serve the Machinery, Transportation Equipment, Electrical Equipment, Appliances and Components, Computer and Electronic Products Industries, mentioned as contracting in the ISM report.

Many of the United States’ export markets are currently contracting, with the Eurozone being especially hard hit by declining new orders across the continent. The BEA and US Census reported that goods exports decreased from $130.7 billion to $128.5 billion; goods imports declined as well from $188.5 billion to $187.8 billion. The fragile global economy is slowing trade.

Precison machined products are used in a wide variety of applications and technologies, and contraction in those markets can’t help but be felt by our industry.

You can see the full ISM release here

Calculated Risk Chart

Soft Slippers

Top Ten Employment Gaining Sectors in Manufacturing November 2011

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Just the top five manufacturing sectors shown below contributed 239,900 net new jobs in 2011 year to date through November according to BLS data.

manufacturing jobs — Leading the way. Data through November.

Precision Machine shops like PMPA members are impacted as follows :

Transportation Equipment: This sector makes up a large share of precision machined industry shipments.

Fabricated Metals: 1) Precision machining is a subset of Fabricated Metals. From our conversations with shop owners almost every shop is looking for skilled people for immediate work; 2) Many of our products are sold to customers that are also considered Fabricated Metals.

Machinery: We both purchase machinery and make components that are critical to the manufacture of machinery and equipment.

Motor Vehicles and Parts: This is traditionally the largest market served by the precision machining industry.

Primary Metals: Our suppliers of the majority of raw materials machined.

Semiconductors, Computers : Yep. We make parts for these as well as equipment used in their manufacture.

Beverages and Tobacco: That fountain drink you purchased probably was dispensed through nozzles and fittings made by a precision machine shop.

Chemicals: We make important sensor, fitting, and pressure vessel components for theis Better things for better living industry.

Bottom Line: almost a quarter million net new manufacturing jobs have been added so far in 2011 in manufacturing areas directly related to proecision machining.

Manufacturing, not politicians, is leading this recovery in jobs.

Soda Fountain

Manufacturing Recovery 7 Months and Counting!

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11 industries reported expansion in February. The Precision Machined Products Industry, a sub industry of Fabricated Metals, serves 7 of these industries showing the greatest recovery.
Here are the sectors that reported expansion that precision machining serves:

Machinery;
Computer & Electronic Products;
Miscellaneous Manufacturing;
Transportation Equipment;
Electrical Equipment;
Appliances & Components;
Fabricated Metal Products;

Economic activity in the manufacturing sector expanded in February for the seventh consecutive month, and the overall economy grew for the 10th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business^®.
The PMI index for February was 56.5 down 1.9 percentage points from January. Because the PMI is above 50, the manufacturing economy is expanding.

vanillaicecream_coneboy — How can they run out of vanilla?

According to ISM steel, stainless steel, and aluminum are increasing in price.
Anecdotal data from our conversations with members confirms the ISM numbers, and points out that the metals named above are both more expensive and in short supply.
You know business is improving when they are out of plain vanilla.
Photocredit.