MANUFACTURING UPDATE

- March 2015 -

1. LATEST POLICY

==================================

President Obama launches competition for new textiles-focused manufacturing

innovation institute; new White House Supply Chain Innovation Initiative; and
funding to support small manufacturers
On March 18th in Cleveland Ohio, the President announced nearly $500 million in public-private
investment to strengthen American manufacturing by investing in cutting-edge technologies through a
new, textiles-focused manufacturing institute competition led by the Department of Defense, and by
sharpening the capabilities of small manufacturers through Manufacturing Extension Partnership
competitions in twelve states. The White House, as detailed in a new report, is also launching a Supply
Chain Innovation Initiative focused on building public-private partnerships to strengthen the small U.S.
manufacturers that anchor the nations supply chains.

The Presidents Fiscal Year 2016 Budget, to create jobs and strengthen Americas leadership in advanced
manufacturing technology, provides the resources to double the number of manufacturing innovation
institutes nationwide to 16 by the end of 2016 and fulfills the Presidents goal of building a network of
up to 45 institutes over the decade.
More: White House Press Release

Sens. Coons, Graham, Gillibrand, Ayotte and Baldwin introduce bipartisan bill to
designate Manufacturing Universities
U.S. Senators Chris Coons (D-Del.), who leads the Manufacturing Jobs for America campaign, Lindsey
Graham (R-S.C.), Kirsten Gillibrand (D-N.Y.), Kelly Ayotte (R-N.H.), and Tammy Baldwin (D-Wis.)
introduced bipartisan legislation to help schools strengthen their engineering programs and meet the
growing demands of 21st century manufacturing. The bill would designate 25 universities as
Manufacturing Universities and provide incentives to better align educational offerings with the needs
of modern manufacturers. The incentives would be used to bolster universities efforts to focus on
manufacturing engineering and curricula specifically related to targeted industries.

The Manufacturing Universities Act of 2015 would establish a program designating 25 schools as
Manufacturing Universities. Designated schools would receive $5 million per year for four years to
meet specific goals, including focusing engineering programs on manufacturing, building new
partnerships with manufacturing firms, growing training opportunities, and fostering manufacturing
entrepreneurship. Companion legislation was introduced in the House of Representatives by U.S.
Representatives Elizabeth Esty (D-Conn.), Chris Collins (R-N.Y.), Paul Tonko (D-N.Y.), Rodney Davis (R-Ill.),
Patrick Meehan (R-Pa.), and Mike Thompson (D-Calif.).
More: Coons Release

Merkley, Franken introduce legislation to promote education in science,

technology, engineering and mathematics (STEM)

Oregon Senator Jeff Merkley and Senator Al Franken (D-MN) introduced legislation designed to increase
student access to courses in STEM education subjects and provide additional resources to recruit, train,
and support teachers of these subjects.
The legislation that Senators Merkley and Franken introduced will help improve student achievement in
STEM education by improving instruction in STEM subjects. The legislation aims to:

Improve student engagement in, and increase student access to, courses in STEM subjects;
Recruit, train, and support highly-effective teachers in STEM subjects and provide robust tools and
supports for students and teachers;
Close student achievement gaps, and prepare more students to be on track to college and career
readiness and success in these subjects.

Merkley and Franken will seek to include the bill in the Senates re-write of the No Child Left Behind Act
this year. The bill is endorsed by the STEM Education Coalition, an alliance of more than 500 businesses
and professional and education organizations.
More: Merkley Release

Klobuchar, Hoeven reintroduce bipartisan legislation to help fuel innovation,

boost Americas competitiveness
Senators Amy Klobuchar (D-MN) and John Hoeven (R-ND) reintroduced bipartisan legislation that would
help fuel innovation and boost Americas competitiveness in the global economy. The Innovate America
Act would help cut red tape, expand successful education programs, promote U.S. exports in new
markets, and help America retain its competitive edge.
The Innovate America Act would also help increase the competitiveness of small- and medium-sized
businesses by promoting and rewarding schools, technical colleges, and universities that focus on
science, technology, engineering, and math, as well as removing red tape and reducing production costs
for manufacturing businesses. The legislation is endorsed by the Council on Undergraduate Research;
the STEM Education Coalition; the National Science Teachers Association; and Code.org, a nonprofit
organization dedicated to expanding participation in computer science.
More: Klobuchar Release

Shaheen introduces legislation to reauthorize Export-Import Bank

U.S. Senator Jeanne Shaheen introduced legislation to expand and improve the Export-Import Bank to
help small businesses sell their products overseas. The Promoting U.S. Jobs through Exports Act of
2015 would provide long term certainty for small businesses by extending the Export-Import Bank
through 2022, continuing the banks ability to provide businesses with tools they need to compete in the
global marketplace and create American jobs.
Boosting export opportunities for our businesses helps strengthen our economy and creates jobs here
at home, Shaheen said. The Export-Import Bank has successfully assisted countless businesses in New
Hampshire and across the country reach new customers around the world. We ought to do everything
we can to support their ongoing efforts and moving quickly on my bill is the best way forward.
In addition to extending the Export-Import Bank for seven years, the Promoting U.S. Jobs through
Exports Act of 2015 would increase the Banks lending cap by $20 billion over that period, contingent on
the Banks default rate remaining below two percent. It would also increase the Banks loans to small
businesses by five percent.
The Promoting U.S. Jobs through Exports Act of 2015 is co-sponsored by Senators Richard Blumenthal
(D-CT), Al Franken (D-MN) and Dianne Feinstein (D-CA).
More: Shaheen Release

2. OTHER NEWS

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News -- Announcement of new MEP Director

Carroll A. Thomas has been selected to serve as the next MEP Director after a full and open competition
and a rigorous review process. Her selection is pending Department of Commerce approval.
Carroll Thomas is currently the Associate Administrator, Office of Small Business Development Centers
(SBDC), Small Business Administration (SBA). The SBDC is analogous to the MEP program; $114 million
in federal funds support at least half of funding provided to 63 host organizations with over 4,200 expert
business assistance counselors located at over 950 service centers in all 50 states and five U.S.
territories. During her tenure at SBA Ms. Thomas established innovative grant policies, procedures and
processes to oversee $20 million in Disaster Recovery Act funding for small business impacted by
Superstorm Sandy.
More: NIST Release

News -- Sen. Brown announces nearly $450,000 to spur economic development

and manufacturing innovation in Lima

Senator Sherrod Brown (D-OH) announced that the U.S. Department of Commerces (DOC) Economic
Development Administration (EDA) has awarded $449,950 to the Ohio Energy and Advanced
Manufacturing Center in Lima for a Center for High Strain Rate Forming Commercialization. The Center
will bring together several manufacturers to spur innovation and commercialization through
collaboration and co-investment. In October 2014, Brown wrote to the U.S. Department of Commerce,
urging the department to give the Ohio Energy and Advanced Manufacturing Centers proposal full and
fair consideration.
This federal investment will help Lima continue to develop into a leader in manufacturing innovation,
Brown said. Under the Ohio Energy and Advanced Manufacturing Center, manufacturing businesses in
the region will be able to leverage their resources to help bring new ideas to the market.
More: Brown Release

News -- MADE in MD: Cardin visits AstraZenecas Biologics Manufacturing

Center, site of more than $200 million investment

U.S. Senator Ben Cardin toured the AstraZeneca biologics manufacturing center in Frederick as part of
his ongoing Made in Maryland jobs tour that highlights the diversity of Maryland products and the
Marylanders who make them.
A dedication to continued invention is evident at AstraZeneca, which has helped develop and deliver
innovative new treatments to benefit patients worldwide. The companys recent multimillion dollar
investment in the Frederick manufacturing center demonstrates the companys enviable trajectory, and
its choice to invest in Maryland demonstrates how well the Free State understands the needs of biotech
businesses, said Senator Cardin. In visiting Maryland businesses ranging from Paul Reed Smith Guitars
to Volvo Truck Group, I have seen a similar spirit of innovation and entrepreneurship running
throughout the state.
In late 2014, AstraZeneca announced plans to expand its biologics manufacturing center in Frederick,
Md. The more than $200 million project is increasing production capacity at the facility to support
AstraZenecas maturing pipeline, and will help position the company to keep pace with a growing
demand for the development and use of biologics.
More: Cardin Release

News Brookings Center for Technology Innovation releases new paper Innovation and manufacturing labor: a value-chain perspective

In a new paper, Kate Whitefoot and Walter Valdivia offer a fresh insight into the sectors labor
composition and trends by examining employment in manufacturing from a value chain perspective.
While the manufacturing sector shed millions of jobs in the 2002-2010 perioda period that included
the Great Recessionemployment in upstream services expanded 26 percent for market analysis, 13
percent for research and development, and 23 percent for design and technical services. Average wages
for these services increased over 10 percent in that period. Going forward, this pattern is likely to be
repeated. Technical occupations, particularly in upstream segments are expected to have the largest
increases in employment and wages.
More: Brookings

3. SECTOR DATA

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Purchasing Managers Index (PMI)

The February PMI was 52.9, a decrease of 0.6 from the January 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 February, Inventories read 52.5 (+1.5 on January), Supplier Deliveries read 54.3 (+1.4), Employment
read 51.4 (-2.7), Production read 56.5 (-1.2), and New Orders read 52.5 (-0.4). This data is in chart form
below.
Change on
prior month
PMI

52.9

-0.6

Inventories

52.5

+1.5

Supplier
deliveries

54.3

+1.4

Employment

51.4

-2.7

Production

53.7

-2.8

New orders

52.5

-4.9

More: Institute for Supply Management

Employment

Preliminary estimates by the Bureau of Labor Statistics show that manufacturing employment was up
8,000 in February, at a seasonally adjusted 12.3 million.

Manufacturing employees, millions

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.

Month-on-month change, thousands

+45
+23
+19 +21 +8
+9

15
14

Sep Oct Nov Dec Jan Feb

13
12
11
'05

'06

'07

'08

More: Bureau of Labor Statistics

'09

'10

'11

'12

'13

'14

'15

Reserve Data

103

79

102

77.3

101

101.3

100

78
77
76

99

Manufacturing capacity
utilization (%)

Manufacturing production

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 below chart shows these measures for the last six months.

75
Sep

Oct

Nov

Manufacturing production

Dec

Jan

Feb

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 activity continued to expand at a modest pace for New York manufacturers. The headline
general business conditions index, at 6.9, remained close to last months level.
More: NY Fed
Philadelphia Fed (eastern PA, southern NJ, and DE)
Manufacturing activity in the region increased at a modest pace in March current indicators for
general activity and new orders were positive and remained near their low readings in February.
More: Philly Fed
Richmond Fed (DC, MD, NC, SC, Virginia & most of WV)
Manufacturing activity declined in March, according to the most recent survey by the Federal Reserve
Bank of Richmond.
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. The next release is preliminarily scheduled for spring of 2015.
More: Chicago Fed

Kansas City Fed (western MO, NE, KS, OK, WY, CO & northern NM)
[M]anufacturing activity rose just slightly from the previous month, but producers expected activity to
pick up moderately in the months ahead.
More: Kansas City Fed
Dallas Fed (TX, northern LA and southern NM)
Texas factory activity declined in March The production index, a key measure of state manufacturing
conditions, fell to -5.2, posting its first negative reading in nearly two years.
More: Dallas Fed

U.S. Manufacturing Technology Orders (USMTO)

January U.S. manufacturing technology orders totaled $341.2 million, down 32.9% from December, and
down 4.8% when compared with January 2014.
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 January
2015 orders on a national and regional basis. Fields marked na denote where, due to changes in the
make-up of survey participants, an accurate reflection of the data is not available.
Year-over-year
change (%)
Total
Northeast

January
orders ($m)
341.2

-4.8

86.8

na

Southeast -29.4

26.3

North Central-East

+10.5

North Central-West

+16.7

93.9
57.1

South Central

na

na

West

na

na

More: Association for Manufacturing Technology

4. ABOUT THIS NEWSLETTER

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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
Riley_Ohlson@coons.senate.gov.