Manufacturing Orders Up In Another Positive Sign For 2011

More good news for American manufacturing. On the heels of yesterday's report which showed manufacturing in December posted its 17th straight month of growth, the Census Bureau has a new report on manufactured goods.

The takeaway is positive: in November, new orders for manufactured goods (most notably metals, construction machinery, and electronic products) increased by $3.2 billion (0.7 percent). The number is even higher, says Bernard Baumohl, chief global economist at the Economic Outlook Group, if we exclude orders for civilian aircrafts -- a wildly fluctuating category that dropped by fifty percent and tells us little about overall economic recovery.

The economists we spoke with agreed that this latest set of data was universally positive. "We're starting off very strongly this year," Baumohl said, "this will all mean that as orders pick up it will lead to incrases in future production, and that production willl lead to future employment."

Unfortunately, this doesn't mean that manufacturers will necessarily be hiring at increased rates; there isn't a direct link between the factory orders and hiring. But, Joshua Shapiro, Chief U.S. Economist at MFR, Inc. says, "the overall picture within the report is hardly surprising: what we're seeing is increased evidence that recovery is strong."

Baumohl thought the positive news will be reflected by a boost in employment beginning early 2011, and expects this Friday's coming jobs report to be positive. Of course, this says nothing about what the new employment opportunities will be, and as this New York Times piece recently reported, finding a new job does not mean it will be as good as the one that was lost.

Comments

[becarefulofwhatyoubuy]

02:35 PM on 01/13/2011

Here's another slant. I have a close friend who works for ^%atherman tools. They manufacture multi-purpose pocket tools. They do this within the US. Their orders are coming in, although they have dropped as compared to 2 years ago.
However, their biggest client is the US Military. So I guess that that gives them some stability in the manufacturing arena.
For awhile, they also have decent repeat business, as those pocket tools were confiscated in huge amounts at airport screening stations. Leaving one to repurchase another replacement tool.
I used to watch the state's auction items on eBay, and pallets of these tools would come up for bid, in bulk lots, all different varieties. I assumed they were the ones they confiscated at the airport.

[oilfield]

01:17 AM on 01/06/2011

the chinese must be ordering more manufacturing equipment.

[Homer Strump]

05:42 PM on 01/05/2011

Why can't they put a monetary value on a job that finds its way from USA to India or China. That would be one way of increasing our GDP.

[Icantbelieveher]

10:59 AM on 01/05/2011

The fact is that if they continue to ship our jobs overseas, Americans will have less and less $$$$ to buy what these corporations are selling!  There is no other industrialized country that will allow corporations to fleece their citizens like our government allows them to do to American citizens.  China has even raised their minimum wage!

There's no other country that will allow corporations to run their government and country, and once they've finished the American consumer completely off, there will no longer be the buying power in any other country that there is in America!  They are cutting their nose to spite their face because of their greed and their constant need to make more money now!  They'll end up either out of business or much, much smaller when they've destroyed their own consumers!

[sc300nc]

10:21 AM on 01/05/2011

amazing how a gop win in november energizes the private sector.

[Icantbelieveher]

10:50 AM on 01/05/2011

Sure!  When they realize that they'll be able to continue to redistribution of wealth upward, why wouldn't they hire at lower wages than before?  The corporations are sitting on record profit from two years of an Obama administration -- and now that republicans are in office, they'll be able to continue to avoid taxes on that money, and pay their CEOs 300 times what they pay their workers!

What's not to like?

[mogens]

07:22 AM on 01/05/2011

The outsourcing in the USA has goe too far.
The % of the workforce engaged in manufacturing in the USA is 10%.
In the EU it is 17%. You don't need to outsource that much, and by the way, once manufacturing has moved design and development tends to follow, because much product development is on-the-spot testing.
The main problems is,first that your dircetors are not engieneers or other prodution related people, but economists or other people, that never has had any experience with production.
the second is the focus of share holder value, that makes you focus on 3-months profit. to use an old phrase, that is the way to kill the goose that laid the golden eggs.

[sc300nc]

10:22 AM on 01/05/2011

you missing those $3 an hour jobs making that cheap plastic cr*p?

[karen1p]

01:10 AM on 01/05/2011

Manufacturing up? Really? Not in our manufacturing.....we are hanging on by a thread.....and this business is 76 years old, formerly quite flush with money. Not so much now. How long can businesses deal with margins collapsing???

[thecobra]

07:42 PM on 01/04/2011

The manufacturing company that I work for just announced at an employee meeting that we had just finished the best quarter in 25 years of business. To celebrate, they announced the permanent lay off of the 2nd shift (60 people). We will also be expecting substantial layoffs of the 1st shift (160 people). This is due to the fact that the positions will be moved to China due to the better return on the dollar. The average hourly wage at our plant is 8.25. Happy New Year....

[Gingerale]

09:57 PM on 01/04/2011

This should not be allowed!

http://www.e-tabitha.com/2011/01/who-me.html

[oilfield]

10:31 PM on 01/04/2011

what a shame....it would have been better to stay in the us and automate where some jobs are maintained and quality is also maintained.

[TresJolie7]

04:49 PM on 01/04/2011

Good news! Hope it continues!

[rikster]

04:25 PM on 01/04/2011

manufacturing orders up...? who's buying..? oh...the Chinese are....

[OldTulsan]

03:21 PM on 01/04/2011

Obama has already given up on U.S. manufacturing...

http://www.manufacturingnews.com/news/newss/summers123.html
Obama's Top Economist Discloses Why The Administration Refused To Support U.S. Manufacturing

"For the past two years, executives of domestic manufacturing companies -- along with their workers -- were in a daze, wondering why the Obama administration pushed no policies to counter the hemorrhage and the continued offshoring of American production.

Now it is clear.

Obama's outgoing chief economist Lawrence Summers does not think it necessary for the United States to mass-produce products that would be consumed by hundreds of millions of Americans. Summers justifies this position by stating that even the number of manufacturing jobs in China is declining, when in fact, they are not.

"We are moving towards a knowledge and service economy," said the departing director of Obama's National Economic Council in a brusque farewell address at the Economic Policy Institute in Washington, D.C. "You don't succeed by producing exactly the same thing that other people are producing in the same way just at a lower cost," he added. "There is no going back to the past. Technology is accelerating productivity in mass production to the point where even China has seen manufacturing employment decline by more than ten million jobs over the most recent decade for which data is available..."

[Shaun Hensley]

05:47 PM on 01/04/2011

I sure hope Larry Summers doesn't get hit by a bus.

[OldTulsan]

11:33 PM on 01/04/2011

If it happens, let it be a bus made in China.

[raphaelbonee]

03:12 PM on 01/04/2011

I've tried toexplain the why of tariffs inthe simplest way possible andthebest I've come up with is toliken them tothe royalty fees a corporation gets whena competing company wantsto produce aproduct using its patents.

The fees areto compensate the corporation forthe higher wages ithas topay employees, health insurance, research and development cost andall those things thatwent into refining the process.

Sound familiar. That's right. Higher wages, health insurance, research and development costare exactly what republicans say are keeping usfrom competing withforeign countries.Sowhat would happenif companies stopped enforcing their patents and allowed competitors to produce their product without demanding a royalty fee. Right again companies wouldgo bankrupt from being undersold intheir own marketsor , ifcheap credit were around theywould firstgo deeply in debt thengo bankrupt.

By theway without royalty fees goods would be cheaper. Have you heard that argument before. So if it applies to countries why doesn't it apply to corporations. Whyis congress not demanding corporations drop patent protection and collection of royalty fees inthename of cheaper goods..

This is what has happened to america under free trade. The lackof tariffs has allowed other countries and corporations that moved abroad to undersell usin ourown market place. Free trade has taken the jobs that supported our standard ofliving and put the cash from them inthe pockets of corporations.

To nowgive corporations added tax breaks istoadd insult to injury. We should be giving them the boot. You want tosee full employment. Startcharging countries to play in our market. Startcharging tariffs.

[ClintH]

03:04 PM on 01/04/2011

So the tax cuts are working? RIGHT!!!

[EcnelisDoogod]

03:02 PM on 01/04/2011

Surveillance cameras, drones, and other military spending is way up!! Quality of life, not so much.

However beautiful the strategy, you should occasionally look at the results.
Winston Churchill