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MANUFACTURING UPDATE

- October 2015 - 1. LATEST POLICY ================================== Peters Remanufacturing Bill Signed into Law by President President Obama has signed into law legislation introduced by U.S. Senator Gary Peters, the Federal Vehicle Repair Cost Savings Act, which requires federal agencies to encourage the use of remanufactured parts in federal vehicle repairs when doing so lowers costs, maintains quality and performance and does not compromise safety.

“Maintaining the federal vehicle fleet is a nearly $1 billion annual expense, and promoting the use of remanufactured parts for repairs helps cut costs and ensure tax dollars are being used efficiently,” said Senator Peters. “I’m proud that the first bill I introduced in the Senate has been signed into law by the President. This commonsense, bipartisan law will help reduce wasteful spending and support Michigan’s growing remanufacturing industry.” Peters introduced the legislation with Republican Senator Jim Lankford (OK), and Congressman Bill Huizenga (MI-2) introduced companion legislation in the House of Representatives. More: Peters Release Murphy Introduces 21st Century Buy American Act to Support American Manufacturers While visiting Ansonia, Connecticut’s American Precision Manufacturing, U.S. Senator Chris Murphy (D-Conn.) announced the introduction of his 21st Century Buy American Act. The 21st Century Buy American Act will strengthen existing Buy American standards to ensure that the U.S. government prioritizes the purchase of American-made goods. The legislation will comprehensively reform the outdated Buy American Act, which was signed into law more than 80 years ago. More: Murphy Release Warner, Portman, and Collins Bill to Provide Regulatory Relief for Businesses and Workers Advances in the Senate U.S. Senators Rob Portman (R-Ohio), Mark Warner (D-Va.), and Susan Collins (R-Maine) announced that their bipartisan legislation requiring independent agencies to analyze the costs and benefits of new regulations and tailor new rules to minimize unnecessary burdens on the economy has passed out of the Senate Homeland Security and Governmental Affairs Committee. Portman and Warner are the co-authors of this legislation and Collins is an original cosponsor. More: Warner Release

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Trans-Pacific Partnership Is Reached, but Faces Scrutiny in Congress The United States, Japan and 10 other Pacific Rim nations on Monday reached final agreement on the largest regional trade accord in history, teeing up what could be the toughest fight President Obama will face in his final year in office: securing approval from Congress. More: New York Times Statement by the President on the Trans-Pacific Partnership I've spent every day of my presidency fighting to grow our economy and strengthen our middle class. That means making sure our workers have a fair shot to get ahead here at home, and a fair chance to compete around the world. My approach to trade has been guided by a unifying principle: leveling the playing field for American workers and businesses, so we can export more products stamped Made in America all over the world that support higher-paying American jobs here at home. More: White House Release House Bipartisan Petition Forces Vote on Ex-Im Bank Reauthorization A majority of House lawmakers took a rare procedural move to force a vote later this month on reauthorizing the U.S. Export-Import Bank, a blow to conservative Republicans who want to close the trade bank. More: Wall Street Journal The Largest Apprenticeship Investment in U.S. History Since Day One, the Obama administration has been focused on building a training and workforce system that serves job seekers and job creators alike. We’re empowering people with the tools to punch their ticket to the middle class, while giving employers a pipeline of skilled workers so they can grow and compete in the 21st-century economy. More: Department of Labor Release

Senators Baldwin, Coons Recognize National Manufacturing Day on Senate Floor WASHINGTON – U.S. Senators Tammy Baldwin (D-Wis.) and Chris Coons (D-Del.) spoke on the Senate floor to recognize National Manufacturing Day. Senator Al Franken (D-Minn.) also joined Senators Coons and Baldwin on the floor in support. National Manufacturing Day occurs on the first Friday of October every year and is a celebration of modern manufacturing meant to inspire the next generation of manufacturers. More: Baldwin Release 2. OTHER NEWS ================================== On National Manufacturing Day, U.S. Industry Nears Upswing Though recent industrial data have left little room for celebration among U.S. manufacturers, scores of production plants across the country are switching up their daily routines Friday, opening factory doors to students, parents and politicians in recognition of National Manufacturing Day. More: U.S. News & World Report

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U.S. Commerce Secretary Visits Delaware Manufacturers When asked what attracts young people to careers in manufacturing, Hodgson Vo-tech senior Anthony Dominelli offered his own experience. “Honestly, I never heard of a millwright until I went to school at Hodgson,” he said. “But now I love it and it’s what I want to do for a living.” More: Delaware Online Senator Stabenow Celebrates Manufacturing Day With Local Students at Detroit Manufacturing Systems In celebration of Manufacturing Day, U.S. Senator Debbie Stabenow delivered remarks at Detroit Manufacturing Systems, which opened its doors to hundreds of students, parents and educators on Friday, October 2. School groups had the opportunity to tour the plant and learn about career opportunities in manufacturing. More: Stabenow Release ICYMI: Senator Coons’ oped: Manufacturing Can be Transformed in Delaware Almost every day, I ride Amtrak between Wilmington and Washington, D.C., and each day out the window, I see the site of the old Chrysler plant in Newark. Each time I see it, I think about being there 15 years ago when I first ran for public office, introducing myself to thousands of hard-working employees. Some of those men and women had just graduated from high school and others had been there for decades, but they all shared one thing in common: they had good-paying, steady manufacturing jobs. More: Coons Release

On National Manufacturing Day, Senator Gillibrand Tours Defelsko Corp; Pushes for New Legislation to Boost Advanced Manufacturing & Workforce Development U.S. Senator Kirsten Gillibrand marked National Manufacturing Day and toured DeFelsko Corporation. Friday [was] National Manufacturing Day, a celebration of modern manufacturing intended to inspire young Americans to learn STEM skills and pursue careers in advanced manufacturing. More: Gillibrand Release On Senate Floor, U.S. Senator Tammy Baldwin to Deliver Call to Action for Wisconsin Manufacturing On the Senate floor, U.S. Senator Tammy Baldwin use[d] the kick-off of National Manufacturing Day and Wisconsin Manufacturing Month to deliver a call to action for our manufacturing economy. More: Baldwin Release Senator Coons, Representative Massie highlight Problems With Patent Reform Bills in Google Hangout Event Today, U.S. Senator Chris Coons (D-Del.) and Representative Thomas Massie (R-KY) participated in a bipartisan online Google Hangout to discuss their concerns with patent legislation (S. 1137 and H.R. 9) currently under consideration in Congress. Patent expert Gene Quinn moderated the discussion and the members took questions from online viewers via Twitter. More: Coons Release

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Blumenthal, Murphy, Courtney, Applaud $6 Million from U.S. DOL to Fund Eastern Connecticut Manufacturing Pipeline Initiative U.S. Senator Richard Blumenthal (D-Conn.), U.S. Senator Chris Murphy (D-Conn.) and Congressman Joe Courtney (D-2) today applauded $6 million in federal funds from the U.S. Department of Labor to support the Eastern Connecticut Manufacturing Pipeline Initiative. More: Blumenthal Release Senator Markey, Mayor Walsh Announce $3 Million Federal Grant to Support Construction and Hospitality Careers Friday, October 2, 2015 - Mayor Martin J. Walsh and Senator Edward J. Markey today announced a $3 million grant from the Obama Administration to expand apprenticeship opportunities in construction and hospitality through the Mayor's Office of Workforce Development. The City's award, part of the $175 million American Apprenticeship Grant program, will serve 394 participants seeking to advance careers in the construction and hospitality sectors. More: Markey Release Following Job Loss at Lima's Joint Systems Manufacturing Center, Brown, Portman, and Jordan Announce More than $3 Million in Federal Resources to Support Manufacturing in Allen County WASHINGTON, D.C. – U.S. Sens. Sherrod Brown (D-OH), U.S. Sen. Rob Portman (R-OH), and U.S. Rep. Jim Jordan (R-OH-4) today announced that, following their letters in support of Phase Two grant funding for Allen County, the U.S. Department of Defense’s Office of Economic Adjustment has awarded $3,013,590 to the county. Allen County qualified for this grant due to job loss at the Joint Systems Manufacturing Center (JSMC) in Lima. More: Brown Release Cardin, Mikulski, Delaney Announce More Than $600,000 in Federal Funds to Educate Hagerstown Community College Students in Advanced Manufacturing U.S. Senators Ben Cardin and Barbara A. Mikulski, together with U.S. Representative John Delaney (all D-Md.), today announced that the National Science Foundation (NSF) has awarded the Hagerstown Community College (HCC) $617,648 to support the development of a new advanced manufacturing technology degree program, an industrial technology certificate program and a basic electronics certificate program. More: Cardin Release The $100,000 job: Be an Apprentice Mike Taylor may represent the bridge to America's job skills gap. He went to a 4-year college and then waited tables at a restaurant even as he struggled to pay off college loans. Two years later, he did what many Americans are doing less and less: he became an apprentice. There are 5.8 million job openings in the United States -- a record high number. It's a positive, and indicates that companies are hiring. But hidden behind the huge number of job openings is the fact many Americans don't have the skills to fill them. More: CNN

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3. SECTOR DATA ================================== Purchasing Managers’ Index (PMI) The September PMI registered 50.2 percent, a decrease of 0.9 percentage point from the August reading of 51.1 percent. Economic activity in the manufacturing sector expanded in September for the 33rd consecutive month, and the overall economy grew for the 76th consecutive month. The PMI is a widely watched measure of aggregate manufacturing strength. The 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 September, Inventories read 48.5 (no change from August), Supplier Deliveries read 50.2 (-0.5%), Employment read 50.5 (-0.7%), Production read 51.8 (-1.8%), and New Orders read 50.1 (-1.6%). This data is in chart form below.

More: Institute for Supply Management

50.1

51.8

50.5

50.2

48.5

50.2

New orders

Production

Employment

Supplierdeliveries

Inventories

PMI

% Change on prior month

-0.9

0.0

-0.5

-0.7

-1.8

-1.6

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Employment Preliminary estimates by the Bureau of Labor Statistics show that manufacturing employment was down 9,000 in September, at a seasonally adjusted 12.318 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 for the last six months (in thousands). Both numbers are seasonally adjusted.

More: Bureau of Labor Statistics Federal Reserve 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. The chart below shows these measures for the last six months.

More: Fed In addition to the Fed’s 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.

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12

13

14

15

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Man

ufac

turin

g em

ploy

ees,

mill

ions

0 +6 +1 +11

-18 -9

Apr May Jun Jul Aug Sep

Month-on-month change, thousands

105.3

75.8

60

70

80

90

100

100

102

104

106

108

Mar April May June July Aug

Manufacturing capacity

utilization (%)

Man

ufac

turin

g pr

oduc

tion

Manufacturing productionManufacturing capacity utilization

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New York Fed (NY state, 12 northern NJ counties, and Fairfield County in CT) “The October 2015 Empire State Manufacturing Survey indicates that business activity declined for a third consecutive month for New York manufacturers. The headline general business conditions index edged up three points, but remained negative at -11.4.” More: NY Fed Philadelphia Fed (eastern PA, southern NJ, and DE) “Manufacturing conditions in the region continued to weaken in October, according to firms responding to this month’s Manufacturing Business Outlook Survey. The indicator for general activity remained negative, while the new orders and shipments indexes turned negative this month.” More: Philadelphia Fed Richmond Fed (DC, MD, NC, SC, Virginia & most of WV) “Fifth District manufacturing activity slowed in September, according to the most recent survey by the Federal Reserve Bank of Richmond. Order backlogs and new orders decreased, while shipments declined.” More: Richmond Fed Chicago Fed (southern WI, IA, northern IL, northern IN, and southern MI) “In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification.” More: Chicago Fed Kansas City Fed (western MO, NE, KS, OK, WY, CO & northern NM) “Tenth District manufacturing activity declined at a similar pace as in previous months, while expectations for future activity dropped considerably. Producers continued to cite weak oil and gas activity along with a strong dollar as key reasons for the sluggish activity” More: Kansas City Fed Dallas Fed (TX, northern LA and southern NM) “Texas factory activity was essentially flat in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained near zero (0.9), suggesting output held steady for a second month in a row after several months of declines.” More: Dallas Fed

U.S. Manufacturing Technology Orders (USMTO) August U.S. manufacturing technology orders totaled $285.92 million, down 10.2% from July’s $318.48 million and down 21.2% when compared with the total of $362.65 million reported for August 2014. With a year-to-date total of $2,771.23 million, 2015 was down 10% when compared with 2014. “While there is a sense of unease in manufacturing now as indicated by this reduction in orders combined with drops in the PMI and industrial production, some leveling after a period of strong growth is expected and helps build stable longer term growth,” said AMT President Douglas K. Woods. “We are a diversified industry, and pockets of manufacturing continue to show resilience, such as automotive stamping and medical devices. While there is some cause for caution, we do not anticipate more than market flatness into the early part of 2016.”

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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 August 2015 orders on a national and regional basis. Fields marked “n/a” denote where, due to changes in the make-up of survey participants, an accurate reflection of the data is not available.

More: Association for Manufacturing Technology 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 Peter_Winter@coons.senate.gov.

n/a

-46.9

-11.0

-8.0

18.9

-22.3

-10.2

West

South Central

North Central-West

North Central-East

Southeast

Northeast

Total 285.9

51.0

45.4

79.3

51.1

n/a

46.0

Year-over-yearchange (%)

Augustorders ($m)