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New orders for durable goods in the U.S. increased more than expected last month ( and ). Shipments were virtually unchanged.

What’s going on: Orders for manufactured durable goods rose 2.6% in March, to $283.4 billion.

• The rise followed a downwardly revised 0.7% increase in February.
• Shipments of durable goods slipped slightly, down $0.1 billion, but remained essentially flat at $282.4 billion following a 1.2% increase in February.

The details: Excluding transportation, new orders increased 0.2%, and excluding defense, new orders rose 2.3%.

• Transportation equipment drove the slight decrease in shipments of durable goods.

Inventories and unfilled orders: Stocks of manufactured durable goods were nearly unchanged at $527.9 billion, a decrease of less than $0.1 billion from February. This follows seven consecutive monthly increases.

• Unfilled orders for manufactured durable goods rose 0.4% in March to $1,397.2 billion, following a decrease in February.

It’s been nearly a month since a cargo ship hit the Francis Scott Key Bridge in Baltimore, Maryland, resulting in six deaths, the destruction of the bridge and the shuttering of an important East Coast port.

• But thanks to hard behind-the-scenes work by Norfolk Southern railway since the accident, customers aren’t feeling the supply chain pinch the way they otherwise would.

What happened: 17�Թ����� President and CEO Jay Timmons, along with an 17�Թ����� delegation, visited the Port of Baltimore last Friday to tour Norfolk Southern’s operations there. The port is the largest for vehicle shipping in the U.S. and was the in the nation by total tonnage in 2021.

• On March 26, the day the Singapore-flagged Dali cargo vessel hit the Key Bridge, Norfolk Southern—which moves of cargo annually—began strategizing ways to support increased shipping volumes on behalf of its customers. And it’s been doing that ever since.
• “We often say the weight of the world moves on rail … and it’s true,” Norfolk Southern Chief Marketing Officer and 17�Թ����� board member Ed Elkins told the 17�Թ����� during the site visit. “Our ability to serve the market through temporary disruption is really a demonstration of our strategy in action, where we leverage the experience of our railroaders and the strength of our franchise to find a to provide safe, reliable service.”

Quick adaptation: Norfolk Southern’s strategy for adapting to the closure of Baltimore’s port has included:

• The launch early this month of a dedicated new service to move freight between the ports of New York and New Jersey and Baltimore’s Seagirt Marine Terminal;
• The facilitation by the railway’s Triple Crown Services Inc.—a door-to-door East Coast truckload transit network—of a dedicated intermodal service for cargo owners who require door-to-door service;
• The use of “Go Teams,” groups of employees ready for rapid response service and created by Norfolk Southern during the pandemic; and
• Regional collaboration with the Port of Virginia to leverage service points including the Virginia Inland Port and others.

Reopening: The Port of Baltimore could be by the end of May, the U.S. Army Corps of Engineers said earlier this month.

• “The 17�Թ����� will stay in close coordination with our members regarding supply chain impacts stemming from the collapse of the Francis Scott Key Bridge,” said 17�Թ����� Director of Transportation, Infrastructure and Labor Policy Max Hyman. “We also remain engaged with leading federal officials on recovery efforts and will continue to support critical infrastructure projects such as the Port of Baltimore.”

In a move that will hinder the growth of manufacturing in the U.S., according to the 17�Թ�����, the Environmental Protection Agency on Friday designated two widely used chemicals as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act, or Superfund law, (subscription) reports.

What’s going on: The addition of two per- and polyfluoroalkyl substances, or PFAS, to the federal list “means the EPA can investigate and clean up releases of the chemicals and ensure that leaks, spills and other releases are reported. Under CERCLA, the government and other parties can sue for contributions to cleanups and to recover costs related to those actions.”

• The newly added PFAS are perfluorooctanoic acid, or PFOA, and perfluorooctanesulfonic acid, or PFOS. PFAS have been used across industries for decades for their unmatched ability to douse fires and resist corrosion, stains and grease.
• The news comes the same month the EPA announced the national regulation limiting PFAS levels in drinking water to near-zero levels.

What’s in it: “The rule requires entities to immediately report releases of PFOA and PFOS that meet or exceed the ‘reportable quantity’ to the National Response Center, state or tribal emergency response commission, and the local or tribal emergency planning committee, according to the EPA.”

Why it’s problematic: “[T]his unprecedented use of CERCLA authority by the EPA will only hamper President Biden’s vision of growing the manufacturing sector in the U.S.,”  17�Թ����� Managing Vice President of Policy Chris Netram , adding that manufacturers support smart efforts to remove harmful substances from the environment.

• “The unique and unmatched chemical bond of these compounds means that there are no existing replacements for the critical products they make up.”
• Furthermore, the overly broad designation of PFOA and PFOS as hazardous “will make it harder for our industry to create innovative products and jobs.”

Manufacturing output slowed in April, according to index provider .

What’s going on: While overall business activity continued to grow this month—albeit at a slower pace—manufacturing growth eased.

• S&P Global’s Flash US Manufacturing PMI came in at 49.9, a four-month low and down from March’s 51.9.
• Any number below 50 indicates contraction.

Why it’s happening: The decline in orders can be linked “to inflationary pressures, weak demand and sufficient stock holdings at customers.”

However … Employment in manufacturing in April rose modestly.

What it means: “[T]he drivers of inflation have changed,” said S&P Global Market Intelligence Chief Business Economist Chris Williamson. “Manufacturing has now registered the steeper rate of price increases in three of the past four months, with
factory cost pressures intensifying in April amid higher raw material and fuel prices.”

In a significant change that protects manufacturers’ intellectual property rights, an updated draft of the World Health Organization’s pandemic agreement no longer includes IP language that would have pressured or compelled manufacturers to turn their innovations over to foreign countries, including competitors such as China, (subscription) reports.

• Convincing organizations such as the WHO to reject forced IP transfers has been for the 17�Թ�����, and this week’s announcement represents significant progress for manufacturers.

What’s going on: “The latest text has scrapped a clause stating countries will ‘consider supporting’ time-bound suspensions of intellectual property rights during pandemics. Instead, each country will consider supporting ‘appropriate measures’ to scale up the manufacture of products that could help stymie a future pandemic.”

• The draft is set to be put to WHO members next month for a vote at the 77th World Health Assembly in Geneva, Switzerland.
• Subject to applicable laws, under the draft agreement countries will also be required to “support … capacity-building for the transfer of technology and knowhow for pandemic-related health products on mutually agreed terms.”
• The text indicates that the pathogen access and benefit sharing system—which would require nations to share pathogen information “with the WHO in exchange for access to the resulting health products developed to fight the new threat”—is still under negotiation. Thus far, countries have been unable to agree on the terms of that exchange.

Why it’s important: IP waivers would significantly harm manufacturers and their ability to compete globally.

• The 17�Թ����� with regard to the World Trade Organization earlier this year, when it warned policymakers in the U.S. and abroad about the problems inherent in expanding the WTO’s 2022 TRIPS waiver on IP rights to include COVID-19 therapeutics and diagnostics.
• As a of that advocacy, the waiver was ultimately kept out of the WTO’s final Ministerial Declaration last month.
• In addition, in January, the 17�Թ����� responded to the U.S. Department of Health and Human Services’ request for comments regarding the WHO’s pandemic preparedness agreement. The 17�Թ����� urged that any IP waiver be removed from the WHO text.

The funding issue: Another challenge the WHO text puts off is the financing of all the initiatives it lays out.

• While it mentions establishing a “coordinating financial mechanism,” it does not detail how the mechanism would work.

A common theme in science fiction is the fully automated, robotized factory that manufactures nothing but robots. We’re not there yet, but the fully automated manufacturing plant has already begun making everyday products, including computer parts, electric shavers and CNC machines.

The promise of AI: Now generative AI is promising to take manufacturing automation manufacturing to a new level.

• At the 2023 Hannover Messe trade fair in Hanover, Germany, Siemens and Microsoft showcased an offering now in use in factories worldwide: a system that uses ChatGPT to generate code for industrial computers known as programmable logic controllers. (For a deeper dive into what this means for manufacturing, read the by Tim Hornyak in the Innovation Research Interchange’s Research-Technology Management magazine.)

Why it’s important: The innovation allows users to ask ChatGPT to generate code for specific tasks (i.e., a program to operate the stamping of a part).

• In addition to saving time and reducing the likelihood of errors, it is capable of understanding commands given in natural language, a characteristic that vastly increases the number of potential users.

Efficient designs: Creating more efficient designs is another early use case for generative AI.

• General Motors has used the technology to evaluate better designs for some of the roughly 30,000 parts that go into the average car. For example, a standard seat bracket—an important safety component that binds seatbelt fasteners to seats as well as seats to the floor of the car—consists of eight separate pieces welded together.
• Generative-design software used by GM analyzed the requirements and suggested more than 150 alternative designs, far more than the two or three options a designer can typically offer. GM engineers chose one: a single piece of stainless steel that is 40% lighter and 20% stronger than the conventional part.

Read the full story .

Ecolab’s mission hasn’t changed much in more than 100 years. It’s still “bringing science to our customers in a way that drives performance, productivity and less water and energy use.”

• That’s according to Ecolab Chief Sustainability Officer Emilio Tenuta, who says being climate-minded is not only “the right thing to do,” but also at the core of the St. Paul, Minnesota–headquartered water, hygiene and infection-prevention company’s operating model.

A dual purpose: “We make the business case for why sustainability and [profitability] can go hand-in-hand when it comes to driving solutions,” Tenuta told us recently. “It’s why 48,000 Ecolab associates wake up every morning with the feeling, ‘We’re making a real difference in the world.’”

• Ecolab—which recently announced that 100% of its European operations are now powered by renewable energy sources—helps millions of customers worldwide reduce their environmental impact while promoting food safety, maintaining clean environments and optimizing resource use.
• “At Ecolab, we talk about eROI—Exponential Return on Investment,” Tenuta explained. “It’s about understanding that we have the ability to deliver on a business outcome—profitability—while also delivering an environmental impact.”

Don’t forget water: Often neglected in sustainability conversations, Tenuta said, is water. For a full picture of the effect of conservation and innovation efforts on climate, water needs to be factored in.

• “Sometimes we forget the role that water plays in addressing climate change,” he continued. Depending on the type of manufacturing, up to 75% of energy is driven by the water systems. You have to heat it, treat it, pump it, cool it. …Water doesn’t necessarily get the same headlines as climate, but if you follow the water, that’s going to have a lasting impact” on the environment, while also saving you money.

A holistic approach: In addition to being recognized regularly for its environmental stewardship, Ecolab is routinely named to most-ethical-company lists. That’s no accident; to the company, caring for the planet goes hand-in-hand with caring for people, Tenuta told the 17�Թ�����.

Read the full story .

Sales of previously owned homes in the U.S. declined in March, reports.

What’s going on: “Existing home sales, which make up the majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the National Association of Realtors reported Thursday.”

• The median price for a previously owned home last month was $393,500, an increase of 4.8% from March 2023, which was the highest on record.
• The only region of the country to see an increase in existing home sales last month was the Northeast.

Why it’s happening: Higher list prices combined with still-elevated mortgage rates continue to make home purchasing difficult for Americans.

What it means: “Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said NAR Chief Economist Lawrence Yun.

• However, “[t]here are nearly six million more jobs now compared to pre-Covid highs, which suggests more aspiring homebuyers exist in the market.”

A weight-loss drug has shown potential in treating patients with sleep apnea, �������ǰ��ٲ�.

What’s going on: Pharmaceutical manufacturer Eli Lilly’s Zepbound, which is used to treat obesity and diabetes, “was more effective than a placebo at reducing the severity of obstructive sleep apnea, or OSA, in patients with obesity after a year, according to preliminary data” from two late-stage clinical trials.

• In October 2022, the Food and Drug Administration gave the medication a “fast track” designation for patients with moderate to severe OSA and obesity.

Why it’s important: “The results are an early sign of hope for the estimated 80 million patients in the U.S. suffering from OSA, which refers to interrupted breathing during sleep due to narrowed or blocked airways. Around 20 million of those people have moderate-to-severe forms of the disease, but 85% of OSA cases go undiagnosed, according to Eli Lilly.”

• Complications of the condition include excessive fatigue, high blood pressure, stroke, heart failure and type 2 diabetes—and treatment options are limited.

Meeting an “unmet need”: “Addressing this unmet need head-on is critical, and while there are pharmaceutical treatments for the excessive sleepiness associated with OSA, [Zepbound] has the potential to be the first pharmaceutical treatment for the underlying disease,” Eli Lilly Senior Vice President of Product Development Jeff Emmick said Wednesday.

• The sleep apnea trial data means that Medicare may be able to cover the drug, as under , Medicare can pay for weight-loss drugs if they are used for more than weight loss alone.

The Federal Trade Commission will vote next week on the final version of a rule that would prohibit noncompete agreements between employers and their employees,  (subscription) reports.

What’s going on: “According to the FTC’s announcement, the agency’s five commissioners will vote April 23 on whether to ‘authorize public disclosure of the proposed final rule,’ first unveiled in draft form in January 2023. Assuming a vote in the affirmative, staffers will give a presentation on the rule, followed by a second vote to issue the rule in its final form.”

• The agency did not indicate which, if any, changes it has made to the previous version of the rule.
• The FTC received more than 26,000 comments on the rule during the 90-day public comment period.

Why it’s important: A noncompete ban would cause disruption to the majority of manufacturing operations in the U.S., a 2023 17�Թ����� found.

• Some 70% of manufacturers in the U.S. use noncompete agreements, and they do so to safeguard intellectual property, sales information, industrial processes and business strategies.
• Approximately 66% of survey respondents—representing manufacturers of all sizes—said a ban would interfere with their operations.
• Around 50% of those polled said a ban would have a negative effect on their investment in employee training programs.

The 17�Թ����� says: “The FTC’s proposed rule severely threatens manufacturers’ ability to protect intellectual property and responsibly invest in their employees,” said 17�Թ����� Director of Transportation, Infrastructure and Labor Policy Max Hyman.

• “The 17�Թ����� remains on this critical issue for our members and will weigh our options in response to the commission’s vote next week.”