MANUFACTURING UPDATE

- JUNE 2014 -

1. LATEST POLICY
==================================
Passed by the Senate -- Five Manufacturing Jobs for America bills in
Workforce Innovation and Opportunity Act
The Senate passed the Workforce Innovation and Opportunity Act (WIOA) on June 25. The bill
includes five innovative skills-training provisions from the Manufacturing Jobs for America
campaign to help prepare Americas workforce for the manufacturing jobs of the 21st century.
The bill now heads to the House of Representatives for approval.

The bills included were:
Adult Education and Economic Growth Act (S. 1400), sponsored by Sens. Reed (D-RI) and Brown
(D-OH)
WIOA includes key portions of S.1400, which seeks to increase investment in adult education,
expand access to technology and digital literacy skills for adult learners, require better
coordination and integration of adult education with state workforce development systems and
postsecondary education, and strengthen English and civics education for new Americans.
More: Reed press release

America Works Act (S. 453), sponsored by Sens. Hagan (D-NC), Donnelly (D-IN), Heller (R-NV),
Klobuchar (D-MN), and Schumer (D-NY)
WIOA includes provisions from S. 453, which seeks to prioritize federal funding for job training
programs that offer portable, national, and industry-recognized credentials. This reform would
promote job-training programs that match the skills of workers with the needs of local
employers, thereby training individuals for the jobs that are available in their communities right
now.
More: Hagan press release | Donnelly press release

On-the-Job Training Act (S. 1227), sponsored by Sens. Shaheen (D-NH) and Cochran (R-MS)

WIOA includes aspects of S. 1227 to significantly expand opportunities for on-the-job-training.
WIOA requires state workforce investment boards to disseminate information identifying on-
the-job-training opportunities and boosts incentives for employers to participate in on-the-job-
training programs.
More: Shaheen press release

SECTORS Act (S. 1226), sponsored by Sens. Brown (D-OH), Casey (D-PA), Collins (R-ME), and
Durbin (D-IL)
WIOA includes provisions from S.1226 to require state and local Workforce Investment Boards
to establish sector-based partnerships between employers, educators, and local workforce
administrators to train workers for the most in-demand 21st century jobs.
More: Brown press release

Community College to Career Fund (S. 1269), sponsored by Sens. Franken (D-MN), Begich (D-
AK), Durbin (D-IL), and Schatz (D-HI)
WIOA includes aspects of S.1269 to create partnerships between businesses and schools that
facilitate effective job training.
More: Franken press release

Executive Action -- Presidential actions to revitalize manufacturing
The administration announced new federal actions and new commitments from Mayors and
other local leaders to invest in manufacturing.

New actions announced include:
Mayors Maker Challenge
More than 90 Mayors and local leaders committed to the Mayors Maker Challenge to expand
access to physical locations and new manufacturing and prototyping equipment in their
communities, spur manufacturing entrepreneurship, and inspire young people to pursue careers
in manufacturing and engineering.

Streamlining access to $5 billion of advanced equipment in over 700 R&D facilities
The Administration will help manufacturing entrepreneurs access $5 billion worth of advanced
equipment in federal R&D facilities that they may use to develop new technologies and launch
new inventions. For example, entrepreneurs might access NASAs National Center for Advanced
Manufacturing to produce the high-strength, defect-free joints required for cutting-edge
aeronautics.

Expanding investment in the Materials Genome Initiative
Five federal agencies will invest more than $150 million in ground-breaking research to support
the Materials Genome Initiative, upping the Administrations investment in the manufacturing
of advanced materials. The Materials Genome Initiative is a public-private endeavor that aims
to cut in half the time it takes to develop novel materials that can fuel advanced manufacturing
and bolster the 21st century American economy.
More: White House press release

Passed by Committee -- Manufacturing priorities in CJS Appropriations
The Senate Appropriations Committee included a number of manufacturing priorities in the
Commerce, Justice, Science, and Related Agencies appropriations bill, which supports key
programs for manufacturers and entrepreneurs.

Included in the bill were:
Manufacturing Extension Partnerships
Manufacturing Extension Partnerships (MEPs) are the only public-private partnership dedicated
to providing technical support and services to small and medium-sized manufacturers. The
Appropriations Committee recognized the importance of MEPs by raising funding to $141
million, a $13 million increase. According to data from the National Institute of Standards and
Technology, every dollar invested in MEP facilitates $19 in new sales growth and $21 in new
client investment.

National Manufacturing Strategy
The bill directs the Office of Science & Technology Policy to report to Congress with a
comprehensive plan to develop a national manufacturing strategy. This language compliments
the American Manufacturing Competitiveness Act, which is part of Manufacturing Jobs for
America and was introduced by Sens. Coons (D-DE) and Kirk (R-IL).

Bio-Manufacturing
The bill includes language recognizing the importance of U.S. bio-manufacturing and directing
the National Science Foundation (NSF) to increase support for it in its advanced manufacturing
portfolio by dedicating at least $15 million to new bio-manufacturing initiatives.

Foreign Commercial Service
The Department of Commerce announced the expansion of the Foreign Commercial Service,
including four new offices in Angola, Tanzania, Ethiopia, and Mozambique and four office
expansions in Kenya, Ghana, Morocco, and Libya. The expansion will create nearly 70 new
positions and post 17 additional officers globally to help U.S. manufacturers get started in
exporting or increase sales to new global markets.
More: Coons press release


2. OTHER NEWS
==================================
Hearing -- Biobased Manufacturing
The Senate Committee on Agriculture, Nutrition and Forestry held a hearing on the role bio-
based products are playing in helping to revitalize and re-energize American manufacturing, and
how that is helping to grow the economy and create jobs.

Immediately following the hearing, Chairwoman Stabenow (D-MI) hosted a Grow It Here, Make
It Here Spotlight on Innovation event, highlighting new technologies from more than 30
innovators from across the country leading the charge in biobased manufacturing.
More: Senate Committee on Agriculture | Stabenow press release

Floor Speech -- Sen. Franken
Sen. Franken (D-MN) took to the Senate floor to discuss the importance of manufacturing and
workforce training. The Senator spoke about the increasing importance of training to help
workers adapt to changing jobs and requirements.

Careers are different from what they were a generation ago. Very few people stay working in
one job for one company for their entire life anymore. And as technology progresses faster and
faster, workers are going to need to constantly update their skills. We need a workforce
development system that is agile enough to keep up with those changing demands.
More: Franken speech

Report -- Making in America: U.S. Manufacturing Entrepreneurship and
Innovation
The National Economic Council recently released a report looking at the state of manufacturing
in the U.S., and the links between manufacturing and innovation. Key takeaways from the
report include:
U.S. manufacturing plays an outsized role in supporting and driving American
innovation.
U.S. manufacturing is more competitive than it has been in decades.
New technologies are lowering the cost and reducing the time required for businesses
and entrepreneurs to design, test, and produce new products.
These emerging technologies and the renewed focus on manufacturing innovation,
while nascent, are already spurring change in U.S. manufacturing.
More: White House report

Speech -- President Obama at the White House Maker Faire
The President spoke at the first-ever White House Maker Faire, stating that [t]odays D.I.Y. is
tomorrows Made in America. Your projects are examples of a revolution thats taking place in
American manufacturing -- a revolution that can help us create new jobs and industries for
decades to come.

And five years after the worst economic crisis of our lifetimes, our businesses have created jobs
for 51 straight months -- thats 9.4 million new jobs in total. But we know weve got to create
more. And one of the best ways to create more good jobs is by boosting American
manufacturing.

The President went on to describe how government can work with the private sector to bolster
American manufacturing, detailing several such initiatives.
More: Obama speech

News -- Brown pushes administration to protect U.S. steel manufacturers
Sen. Brown called on the administration to take action to protect U.S. steel manufacturers from
unfair foreign competition, and met with Secretary Pritzker to discuss the issue.
More: Brown press release | Brown meeting with Sec. Pritzker

News -- Reed hosts Business Innovators Forum & Workshop
In an effort to accelerate innovation in Rhode Island and help local manufacturers compete for
approximately $2.5 billion in available federal funding each year, Sen. Reed (D-RI), hosted an
Innovators Forum & Workshop. Sen. Reed stated that the goal of the workshop was to help
Rhode Island manufacturers and innovators successfully apply for federal funds that will help
them develop their products and create jobs in Rhode Island.

Our state has a tremendous amount of talent and folks who are involved in cutting edge
research and technology. I think one of the best ways to grow the Rhode Island economy is by
helping companies that are on the cutting edge invest, grow, and hire new workers. Together,
we can help make Rhode Island a great place for entrepreneurs to start and grow a company
and help more small businesses launch their innovative ideas and products here.
More: Reed press release

Floor Speech -- Sen. Coons
Sen. Coons (D-DE) spoke on the Senate floor about the Manufacturing Jobs for America initiative
and the Senates passage of the Workforce Innovation and Opportunity Act, stating: In
manufacturing, it's a core challenge for us to ensure that our workers have the training that
employers are looking for and that our manufacturing companies are globally competitive.
Manufacturing is important to America, to our future, to our middle class, to our communities
and to our families because it pays well, it drives innovation, it contributes greatly to other
sectors in our economy and in communities.
More: Coons speech

Report -- Manufacturing Since the Great Recession
The Commerce Department issued a new report on U.S. manufacturing since the recession. Key
findings of the report include:
Manufacturing has contributed decisively to GDP growth. Since the end of the recession,
real manufacturing value added has climbed 18 percent, compared to an 11 percent rise
in real U.S. GDP, increasing manufacturings share of total GDP to 12.5 percent at the
end of 2013.

Average annual weekly hours for production workers in the manufacturing sector have
climbed to their highest level since the mid-1940s.

The number of manufacturing establishments is growing for the first time since 1999.
More: Commerce Department report

Report -- Building A Nation of Makers
The Milstein Symposium issued a new report on manufacturing, led by former Gov. Barbour of
Mississippi and former Sen. Bayh of Indiana. The report focused on six ideas to accelerate the
innovative capacity of Americas small and medium manufacturers. The ideas are:
1. Talent investment loans to expand human capital. Give small and medium enterprises
(SMEs) government-backed talent investment loans to hire and train workers.

2. Upside-down degrees to connect classroom learning to on-the-job learning. Upside-
down programs allow students to transfer accredited technical training, work
experience, military training, or community college coursework as credit towards a
bachelors degree. Expansion of such programs, with emphasis on manufacturing
related fields, will reduce barriers between skills training and degree attainment, and
enhance the quality of the manufacturing workforce.

3. A skills census to build a more efficient skilled labor force. A regular survey of employers
to determine current and projected skills needs to help businesses, policymakers, and
educators tailor their programs to employers needs.

4. A national supply chain to fully map Americas manufacturing ecosystems. A fully-
mapped manufacturing supply chain will allow businesses and policymakers to fill gaps
in the existing infrastructure and keep up with rapid changes in ecosystems formed
around emerging technologies.

5. Up-skilling high school students with expanded technology and engineering certification
programs. Just as AP tests offer transferable college credit, all students should have the
opportunity to acquire industry-recognized technical skills certification before
graduating high school.

6. A Big Trends-Small Firms initiative to diffuse the latest technologies to manufacturing
SMEs. Emerging technologies promise to produce major disruptions to established
business models, yet SMEs often do not possess the tools to leverage these
technologies. A Big Trends-Small Firms initiative, implemented through the
Commerce Departments Manufacturing Extension Partnership, will connect small- and
medium-sized manufacturers with the latest trends.
More: Milstein Symposium report


2. SECTOR DATA
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Purchasing Managers Index (PMI)
June PMI was 55.3, a decrease of 0.1 from the March 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 June, Inventories read 53.0 (unchanged), Supplier Deliveries read 51.9 (-1.3 on May),
Employment read 52.8 (unchanged), Production read 60.0 (-1.0), and New orders read 58.9
(+2.0). This data is in chart form below. July figures will be released on August 1, 2014.
58.9
60.0
52.8
51.9
53.0
55.3
New orders
Production
Employment
Supplier
deliveries
Inventories
PMI
Change on
prior month
-0.1
0.0
-1.3
0.0
-1.0
+2.0

More: ISM

Employment
Preliminary estimates by the Bureau of Labor Statistics show that manufacturing employment
rose by 10 thousand employees in May, to a seasonally adjusted 12.1 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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Dec Jan Feb Mar Apr May
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.
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77.0
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Dec Jan Feb Mar Apr May
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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 improved significantly for a second consecutive month for New York
manufacturers. The headline general business conditions index was 19.3, a reading nearly
identical to last months multiyear high.
More: NY Fed

Philadelphia Fed (eastern PA, southern NJ, and DE)
[R]egional manufacturing activity expanded this month. The diffusion index of current
general activity increased from a reading of 15.4 in May to 17.8 this month. The index has
remained positive for four consecutive months and is at its highest reading since last
September.
More: Philly Fed

Richmond Fed (DC, MD, NC, SC, Virginia & most of WV)
Fifth District manufacturing activity grew mildly in June. Overall, manufacturing conditions
softened slightly. The composite index for manufacturing moved to a
reading of 3 following last months reading of 7.
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 somewhat in June, while producers
expectations for future factory activity showed little change and remained at solid levels. The
month-over-month composite index was 6 in June, down from 10 in May and 7 in April.
More: Kansas City Fed

Dallas Fed (TX, northern LA and southern NM)
Texas factory activity increased again in June The production index, a key measure of state
manufacturing conditions, rose from 11 to 15.5, indicating output grew at a faster pace than in
May.
More: Dallas Fed

U.S. Manufacturing Technology Orders (USMTO)
March U.S. manufacturing technology orders totaled $492.8 million, up 38.5% from February,
and up 2.9% when compared with March 2013.

With a year-to-date total of $1,228.6 million, 2014 is up 0.9% 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.
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-50.3
+15.0
-6.9
-20.4
West
South Central
North Central-West
North Central-East
Southeast
Northeast
Total
391.5
62.7
na
99.6
64.9
62.3
na
Year-over-year
change (%)
Apr
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.