MANUFACTURING UPDATE

- AUGUST 2014 -

1. LATEST POLICY
==================================
International Trade Commission assesses duties on unfair imports of oil
country tubular goods
The International Trade Commission (ITC) voted to assess duties on unfairly traded imports of oil
country tubular goods (OCTG) that materially injure the domestic steel industry.

The ITC approval will result in additional duties being imposed on OCTG producers, preventing
them from undermining the U.S. steel industry.

In July, the Department of Commerce overturned an initial ruling and found that Korean
producers of OCTG, like those in other countries, have been selling the product at less than fair
value in the United States. This vote by the ITC marks final approval of that finding.

Several members of Manufacturing Jobs for America and other Senators had previously written
to and testified before the Department of Commerce and ITC about the importance of
preserving a level playing field for the U.S. steel industry.

Following the final vote, several members of Manufacturing Jobs for America praised the ruling.
Sen. Donnelly (D-IN) said, I am glad to see the International Trade Commission standing
up for the American manufacturing industry and the Hoosier steel community in this
final decision. Their ruling reinforces what I have been saying from the startthat
American workers deserve a level playing field on which to compete.

Sen. Franken (D-MN) said, "This finding is a victory for Minnesota's iron ore industry and
the important jobs it produces. American iron and steel producers and our workers can
compete with anyone in the world on a level playing field. But we can't accept when
other countries dump their goods here at anti-competitive prices, undercutting
Minnesota's producers."

Sen. Klobuchar (D-MN) said, This is a significant victory for hardworking miners in
Minnesota and across the country, and Im pleased that the ITC heeded our calls for
action. These new penalties will help crack down on illegal trade practices and
protect steelworker jobs.
More: ITC finding | Donnelly release | Franken release | Klobuchar release
OMB delays proposed factoryless goods producer revisions to NAICS
OMB announced that it will delay a proposed revision to the North American Industry
Classification System (NAICS) that would introduce the concept of a factoryless goods
producer. This would have counted manufacturing as domestic in the U.S. Census even if the
manufacturing were conducted entirely overseas.

In July, Senators Brown (D-OH), Baldwin (D-WI), Cardin (D-MD), Coons (D-DE), Merkley (D-OR),
Stabenow (D-MI), and Tester (D-MT), most of whom are members of Manufacturing Jobs for
America, wrote to OMB Acting Director Deese to express their concerns about this proposed
change.
More: Brown release | EPI blog post


2. OTHER NEWS
==================================
Other News -- Senators call on GAO to analyze federal manufacturing
programs
In a letter to Government Accountability Office (GAO) Comptroller General Gene Dodaro,
bipartisan group of Senators asked the Office to analyze federal manufacturing policies and
provide recommendations for improvement. The senators requested answers to a range of
questions about the scope, effectiveness, and potential for redundancy of federal
manufacturing programs and tax incentives. The information will help to inform congressional
and executive branch efforts to support the United States steadily recovering manufacturing
sector.

Manufacturing plays a critical role in our countrys economy, the senators wrote. Accounting
for nearly $2 trillion of our nations output, more than 12 million Americans are directly
employed in manufacturing.

Given the importance of manufacturing in the United States, it is critical that federal
manufacturing policy be effective, the senators continued. However, because the sector is
diverse, no one federal department or agency deals exclusively with manufacturing.

The letter was signed by Senators Coons (D-DE), Blunt (R-MO), Coburn (R-OK), Schatz (D-HI), Kirk
(R-IL), Warner (R-VA), and Graham (R-SC).
More: Letter | Coons release
Other News -- MJA Members demonstrate support for Ex-Im
reauthorization
A number of MJA members recently spoke in support of reauthorizing the Export-Import bank,
highlighting manufacturers in their districts supported by the bank. The Export-Import Bank is
set to expire September 30, after which it will not be able to issue new loans.
Senator Baldwin (D-WI) visited Marine Travelift and Dans Fish, two Wisconsin
businesses that have been helped by Export-Import Bank investments. If American
businesses have a level playing field, they can compete against anyone. The Export-
Import Bank is an important tool that helps us create that level playing field, bringing
fairness to global trade and supporting American businesses so they can create jobs and
grow, said Baldwin.

Senator Landrieu (D-LA) called on Congress to reauthorize the Export-Import Bank in
order to continue recent positive momentum on the U.S. trade deficit, which fell to a
five-month low in July. The American energy revolution and strong pro-export policies
continue to narrow our trade deficit. Now is the time to provide certainty to American
businesses looking to ship their goods and services abroad by reauthorizing the Export-
Import Bank, Sen. Landrieu said.

Senator McCaskill (D-MO) met with executives and employees at Western Forms, a
manufacturer of aluminum forming systems, to rally support for the job-creating
benefits of the Export-Import Bank. McCaskill heard from Western Forms employees on
how their company had been positively impacted by the bank, and discussed ways the
banks funding has allowed them to create jobs in Missouri and compete in the global
marketplace. The Export-Import Bank is one of the most important tools available to
help Missouri companies create jobs and succeed in the increasingly competitive global
market, said McCaskill.

Senator Shaheen (D-NH) visited Corfin Industries, WS Badger, and Mercury Systems to
highlight how high-tech manufacturing and export opportunities can help businesses
grow and create jobs. Export promotion has been a top priority of mine ever since my
days as New Hampshire governor, and it will continue to be a priority of mine as we look
for ways to boost our small businesses so they can create more jobs, said Shaheen.
More: Baldwin release | Landrieu release | McCaskill release | Shaheen release

Other News -- Sen. Brown visits local steel manufacturer
Sen. Brown (D-OH) visited Warren Steel Holdings, where he outlined efforts to boost
domestically-manufactured steel and keep Ohioans at work. Earlier in the month, Sen. Brown
had worked with U.S. Rep. Tim Ryan (D-OH-13) and the Public Utilities Commission of Ohio to
reach a deal to put workers of Warren Steel Holdings back to work.

Manufacturing is a cornerstone of our economy and its making a comeback, Brown said.
Thats why its so important to keep the momentum going, by enforcing trade policies that
ensure our workers can compete on a level playing field. We should also pass my bill that would
ensure that American infrastructure projects use American-made steel.
More: Brown release
Other News -- Senators Warner and Mikulski visit Newport News
Shipbuilding
Huntington Ingalls Industries hosted Senators Warner (D-VA) and Mikulski (D-MD) for a tour of
the company's Newport News Shipbuilding division. The visit provided the Senators an
opportunity to meet shipbuilders and get a behind-the-scenes look at the defense industrial
base and American manufacturing.

Newport News Shipbuilding President Matt Mulherin accompanied the Senators on the shipyard
tour, which included a visit to one of the shipyard's submarine construction facilities where PCU
John Warner (SSN 785) is under construction.

Huntington Ingalls Industries designs, builds and manages the life-cycle of the most complex
nuclear and conventionally-powered ships for the U.S. Navy and Coast Guard. Headquartered in
Newport News, Virginia, HII employs more than 39,000 people operating both domestically and
internationally.
More: Warner press release

Other News -- Shaheen visits local training centers and manufacturer
Sen. Shaheen visited River Valley Community College to highlight how job training programs like
the Trade Adjustment Assistance Community College and Career Training Grant Program can
bolster economic opportunity for local manufacturers and help prepare students for high-skill
careers.

Shaheen also visited Pro-Cut International to highlight how expanding trade and exporting
opportunities can help small manufacturers expand and create jobs. Pro-Cut has taken
advantage of the State Trade Export Promotion (STEP) to tap into new overseas markets and
grow.
More: Shaheen release


2. SECTOR DATA
==================================
Purchasing Managers Index (PMI)
August PMI was 59.0, an increase of 1.9 from the July 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 August, Inventories read 52.0 (+3.5 on July), Supplier Deliveries read 53.9 (-0.2),
Employment read 58.1 (-0.1), Production read 64.5 (+3.3), and New Orders read 66.7 (+3.3).
This data is in chart form below. September figures will be released on October 1, 2014.
66.7
64.5
58.1
53.9
52.0
59.0
New orders
Production
Employment
Supplier
deliveries
Inventories
PMI
Change on
prior month
+1.9
+3.5
-0.2
-0.1
+3.3
+3.3

More: ISM

Employment
Preliminary estimates by the Bureau of Labor Statistics show that manufacturing employment
was flat in August, at a seasonally adjusted 12.2 million.

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.

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'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
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Mar Apr May Jun Jul Aug
Month-on-month change, thousands

More: BLS

Fed Data
The Fed publishes monthly data on industrial production and capacity utilization. Industrial
production is represented as an index where the 2007 level equals 100. Capacity utilization is
shown as percent of capacity.
100.7
77.8
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Manufacturing production Manufacturing capacity utilization


In addition to the Feds national 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, interregional comparisons are not suggested.
More: Fed

New York Fed (NY state, 12 northern NJ counties, and Fairfield County in CT)
[B]usiness conditions continued to improve for New York manufacturers, but the improvement
was less widespread than in the previous month. The headline general business conditions
index retreated eleven points to 14.7, after reaching a four-year high in July.
More: NY Fed

Philadelphia Fed (eastern PA, southern NJ, and DE)
The surveys indicator for general activity was higher this month, but indicators for new orders,
shipments, and employment, while positive, fell from their readings in July. The surveys broad
indicators of future activity increased, suggesting that firms remain optimistic about continued
growth over the next six months. The diffusion index of current general activity increased
from a reading of 23.9 in July to 28.0 this month. The index has increased for three consecutive
months and is at its highest reading since March 2011.
More: Philly Fed

Richmond Fed (DC, MD, NC, SC, Virginia & most of WV)
Fifth District manufacturing activity continued to improve in August Overall, manufacturing
conditions continued to improve in August. The composite index for manufacturing climbed to a
reading of 12, the highest reading since March 2011.
More: Richmond Fed

Chicago Fed (southern WI, IA, northern IL, northern IN, and southern MI)
The Chicago Fed Midwest Manufacturing Index is currently suspended, while it undergoes a
process of data and methodology revision in 2014. The next release is preliminarily scheduled
for November 26, 2014.
More: Chicago Fed

Kansas City Fed (western MO, NE, KS, OK, WY, CO & northern NM)
Growth in Tenth District manufacturing activity slowed slightly in August, but producers
expectations for future activity remained solid. The month-over-month composite index was
3 in August, down from 9 in July and 6 in June.
More: Kansas City Fed

Dallas Fed (TX, northern LA and southern NM)
Texas factory activity increased again in August, albeit at a slower pace than in recent months
The production index, a key measure of state manufacturing conditions, fell from 19.1 to 6.8,
indicating output growth slowed from July.
More: Dallas Fed

U.S. Manufacturing Technology Orders (USMTO)
June U.S. manufacturing technology orders totaled $405.7 million, up 12.6% from May, and
down 2.1% when compared with June 2013.

With a year-to-date total of $2,349.4 million, 2014 is down 2.7% compared with 2013.

These numbers and all data in this report are based on the totals of actual data reported by
companies participating in the USMTO program. The chart below shows year-over-year change
and total orders on a national and regional basis.
na
-5.7
+8.6
+7.5
na
-12.8
-2.1
West
South Central
North Central-West
North Central-East
Southeast
Northeast
Total
405.7
66.2
na
119.3
82.9
58.1
na
Year-over-year
change (%)
May
orders ($m)

More: AMT


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 or josh_boylan@coons.senate.gov.