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NAM’s Eisenberg Testifies at EPA Hearing on New Power Plant Regs

2012-05-25T15:33:48Z

Yesterday afternoon NAM Vice President for Energy and Resources Policy Ross Eisenberg testified at the Environmental Protection Agency’s (EPA) public hearing on the proposed Greenhouse Gas New Source Performance Standards for Power Plants (GHG NSPS). Manufacturers are extremely concerned about this new burdensome regulation from the EPA which will drive up energy prices and hurt job growth.

NAM Vice President of Energy and Resources Policy Ross Eisenberg testifies at an EPA hearing on the GHG regulations for new power plants.

Below is a brief excerpt from Eisenberg’s testimony:

“The EPA’s proposed NSPS is a domestic -only policy that sets adangerous precedent: that regulations, as opposed to the market,decide which fuels should be utilized in facilities, a precedent whichcould cascade to other manufacturing sectors. And despite the EPA’s assurances that the rule will not affect existing plants, the EPA in avoluntary settlement agreement has committed to regulate GHGemissions from existing facilities under the same provision, andgroups testifying today have urged the EPA to do so immediately.”

The NAM will be submitting full comments to the EPA outlining our concerns with this rule and what it will mean to manufacturers who use one third of the energy consumed in the U.S. Manufacturers need affordable sources of energy to remain competitive and this rule will certainly damage our ability to compete.

Powering Small Business

2012-05-25T15:04:30Z

On Wednesday NAM Chief Economist Chad Moutray participated in a panel discussing for the Washington Post Live event “Powering Small Business.” The discussion also included Scott Case, CEO of Startup America Partnership and Bob Litan, VP of the Ewing Marion Kauffman Foundation.

NAM Chief Economist Chad Moutray Speaks at the Washington Post Live Event "Powering Small Business." Photo courtesy of the Washington Post.

The half hour discussion focused on the importance of small business to the economy and the challenges they face in today’s economy. Moutray discussed how small manufacturers have been driving much of the job growth in the sector and the importance of tax and regulatory issues to manufacturers.

You can click on this link for some of the video highlights.

Consumer Confidence Jumps Higher in May, Aided by Lower Energy Prices

2012-05-25T14:43:34Z

Consumer confidence jumped significantly in May, according to the Survey of Consumers from the University of Michigan and Thomson Reuters. The consumer sentiment index rose from 76.4 in April to 79.3 in May. This continues a nine-month trend of improvements in attitudes since last August.

The increase was largely due to a sharp increase in Americans’ perceptions about the current economic environment. This suggests that lower energy prices are helping to lift these figures. For instance, inflationary expectations continue to ease, with respondents now expecting 3.1 percent price increases over the next year. This is down from 3.9 percent in March.

Meanwhile, consumer opinions about future economic growth ebbed slightly, from 72.3 to 71.7. Nonetheless, individuals remain more confident about future conditions than they did last year, mirroring the longer-term upward trend.

Chad Moutray is chief economist, National Association of Manufacturers.

BP to Create Thousands of Jobs with Refinery Modernization

2012-05-24T16:33:49Z

Yesterday BP announced that it has reached a $400 million settlement with the Environmental Protection Agency (EPA), the Department of Justice and others that will allow the company to modernize its Whiting, Indiana refinery. BP had been embroiled in multi-year negotiations for a permit for the project, the largest private-sector investment in Indiana history. By finding a way to move forward, BP estimates it will be able to create 10,000 jobs just this year.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

Manufacturing Activity Improves in Kansas City

2012-05-24T15:41:29Z

The Federal Reserve Bank of Kansas City said that manufacturing activity bounced back in May, after slowing in March and April. The composite index had fallen from 13 in February to 9 and 3 in March and April, and it rose to 9 in May.

This is a positive sign, as it suggests a renewal in production and new orders after some spring weaknesses. The index for new orders, for instance, shifted from a contraction (-8) to modest growth (10) for the month. New export orders picked up slightly.

With that said, employment has not yet picked up to reflect the rebound in manufacturing activity in the other figures. The pace of job growth slowed from 12 to 8, with the average workweek still contracting. The workweek index increased from -10 to -2.

The more-optimistic current sentiment also carried through to expectations about the next six months. The forward-looking composite index rose from 12 to 17, with a number of key activity measures showing strong growth predicted for the second half of this year. As an example, expected shipments jumped from 22 to 40, mirroring numbers for production, new orders, employment and capital expenditures. Pricing pressures, which have eased over the past few months, are expected to pick up moving forward.

Overall, it appears that the regional surveys of manufacturing activity are split, with some reporting improvements and others noting weaknesses in the current environment. Kansas City appears to be rebounding like New York, while Philadelphia and Richmond have observed a slowing of growth. Chicago has seen flat growth in its most recent figure. Next week, we will get a sense of what is happening in Texas.

Chad Moutray is chief economist, National Association of Manufacturers.

Transportation Lifts Durable Goods Orders Slightly Higher in April, But Weaknesses Abound

2012-05-24T13:47:39Z

The Census Bureau reported that durable goods orders rose 0.2 percent in April, a slight improvement after March’s 3.7 percent decline. Excluding transportation orders, though, makes a difference. Without transportation, new orders would have fallen by 0.6 percent. Indeed, the strongest gains in April were seen in nondefense aircraft (up 7.2 percent) and motor vehicles (up 5.6 percent).

Outside of transportation, the report mostly observed weaknesses in the sector for new orders. Some of the greatest losses in new orders occurred among defense aircraft (down 34 percent), communications equipment (down 16.9 percent), computers (down 3.1 percent), machinery (down 2.8 percent) and fabricated metals (down 2 percent). One of the sectors bucking this trend was primary metals, whose new sales rose 1.7 percent.

As a result, core capital goods orders (e.g., nondefense capital goods excluding aircraft) were down 1.9 percent in April. This follows a 2.2 percent drop in March. The longer-term trend has been more favorable, with core capital goods up 2 percent year-over-year. The challenge is that new orders are a proxy of new activity, and this suggests weaknesses in durable goods activity in the next month or so.

Meanwhile, shipments of durable goods rose 0.7 percent. Many of the same trends can be seen in the shipments data, with transportation lifting the overall figure. Excluding transportation, durable goods shipments fell 0.3 percent. Still, this was the fifth consecutive month of rising shipment volume. Inventories rose by 0.3 percent, continuing their long streak of gains, with unfilled orders dropping by 0.1 percent.

Chad Moutray is chief economist, National Association of Manufacturers.

Get Rid of the Fiscal Cliff to Create Jobs and Economic Growth

2012-05-23T19:57:24Z

The nonpartisan Congressional Budget Office (CBO) yesterday confirmed what manufacturers have been saying for a long time: cancelling the spending cuts and tax increases set to go into effect on January 1, 2013, will stimulate much-needed economic growth and job creation.

The CBO’s report , “Economic Effects of Reducing the Fiscal Restraint that Is Scheduled to Occur in 2013,” concludes that ,if Congress derails the spending cuts under sequestration and extends current tax relief provisions, GDP will grow at a 4.4 percent rate in 2013, raising employment by two million jobs, on average. Conversely, doing nothing and allowing some $607 billion of across-the-board spending cuts and tax increases to hit our economy will stop our economic recovery in its tracks, sending the country back into a recession.

In fact, CBO estimates that if we fall off the $600B fiscal cliff, the economy will contract by 1.3 percent in the first quarter of 2013 and overall growth in 2013 will be about 0.5 percent. As CBO does point out, though, the short-term benefits of avoiding the fiscal cliff doesn’t eliminate the need for policy makers to make a serious effort to address our nation’s long-term debt and deficit challenges, a position shared by manufacturers. Congress and the Administration need make the hard decisions on tax and entitlement reforms and spending policy to put the nation on a long-term path to growth and job creation.

NAM members have long held that the U.S. tax code represents a drain on our economy and any long-term plan to address our nation’s fiscal challenges should include comprehensive reform of the tax code that encourages job creation, investment and growth.

Manufacturers Returning Jobs from Overseas

2012-05-22T21:30:30Z

Today’s Wall Street Journal article, “Once Made in China: Jobs Trickle Back to U.S. Plants”, detailed the growing “reshoring” trend in manufacturing as more and more companies are deciding to bring facilitates and jobs back from overseas. This trend is another indicator of the positive manufacturing activity we’ve seen over the past several months.

The article highlighted several manufacturers that have collectively created a few thousand positions here in the U.S. as a result of returning certain work.

“U.S. manufacturing has become attractive for some companies as Asian wages have surged over recent years and the wage gap between the U.S. and China has narrowed. The drop in the dollar over the past decade has also made U.S.-produced goods more competitive. And higher oil prices have increased the cost of shipping goods across oceans, making domestic manufacturing more appealing.”

Even with these positive indicators, manufacturers are still finding that it is 20 percent more expensive to do business in the U.S. compared to our major trading partners. Companies are deciding on a case-by-case basis where it makes more financial sense for them to manufacture.

Manufacturers have added 167,000 net new jobs over just the past five months and 489,000 since January 2010. But we must do more. We need polices to help level the playing field to enable manufacturers to export more. We need a predictable and consistent tax code, an “all of the above” energy strategy, and a highly skilled workforce. These are just some policy changes that will help keep manufacturers in the U.S competitive, allowing them to grow and create new jobs.

NAM Appeal of NLRB Overreach Moves Forward

2012-05-24T13:49:32Z

Today, the NAM filed its opening brief on the appeal of the U.S. District Court’s decision on the Notice Posting case against the NLRB. The NAM believes the NLRB lacks the authority to require all employers to put up a poster of employees’ rights.

The judge in the U.S. District Court, however, did not find in favor of the NAM’s argument and held the poster requirement was valid under the Board’s authority to require the poster. The NAM immediately appealed this decision to the U.S. Court of Appeals for the D.C. Circuit and also filed an injunction motion to prevent the rule from taking effect on April 30. On April 17, the NAM was victorious in winning the injunction motion and preventing the rule from going into effect until the appeal is decided.

In the brief filed this afternoon, the NAM argues the U.S. District Court erred in its finding that the Board has the authority to require employers to put up a poster. The NAM points to the legislative intent of the National Labor Relations Act (NLRA), showing Congress never intended to give the NLRB broad rule-making authority outside of unfair labor practice remedies or representation proceedings.

In fact, the legislative history shows when the Act was amended, the inclusion of a notice posting requirement was rejected by Congress. Congress, however, included similar provisions in other labor-related laws passed before and after the NLRA. Why would Congress reject an amendment to the NLRA if they wanted the NLRB to have this authority? It is clear to the NAM and the answer is simple, Congress never intended for the Board to have the authority to require employers to do something or put something up on a wall. We hope the Appeals Court sees this as clearly as the NAM does.

Space Exploration Technologies Launches First Commercial Flight to Space Station

2012-05-24T13:52:04Z

The era of commercial space flight dawned today as an unmanned rocket owned by Space Exploration Technologies lifted off from Cape Canaveral. Its mission, to deliver supplies to the International Space Station.

News accounts noted that, “NASA is counting on companies like Space Exploration Technologies, or SpaceX, to take over the task of flying cargo – and eventually astronauts – to the $100 billion space station, which orbits about 240 miles above Earth. If its test flight is successful, SpaceX would become the first private company to reach the space station, a microgravity research complex for biological, materials, fluid physics and other science experiments and technology demonstrations.”

It’s a big accomplishment and we here at NAM are proud to have a member company like Space Exploration Technologies leading the way in such profound fashion.