Durable Goods Orders Rise
New orders for durable goods in the U.S. increased more than expected last month ( and ). Shipments were virtually unchanged.
What鈥檚 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.
Norfolk Southern Pivots to Serve Customers After Bridge Collapse
It鈥檚 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鈥檛 feeling the supply chain pinch the way they otherwise would.
What happened: 17吃瓜在线 President and CEO Jay Timmons, along with an 17吃瓜在线 delegation, visited the Port of Baltimore last Friday to tour Norfolk Southern鈥檚 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鈥攚hich moves of cargo annually鈥攂egan strategizing ways to support increased shipping volumes on behalf of its customers. And it鈥檚 been doing that ever since.
- 鈥淲e often say the weight of the world moves on rail 鈥 and it鈥檚 true,鈥 Norfolk Southern Chief Marketing Officer and 17吃瓜在线 board member Ed Elkins told the 17吃瓜在线 during the site visit. 鈥淥ur 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.鈥
Quick adaptation: Norfolk Southern鈥檚 strategy for adapting to the closure of Baltimore鈥檚 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鈥檚 Seagirt Marine Terminal;
- The facilitation by the railway鈥檚 Triple Crown Services Inc.鈥攁 door-to-door East Coast truckload transit network鈥攐f a dedicated intermodal service for cargo owners who require door-to-door service;
- The use of 鈥淕o Teams,鈥 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.
- 鈥淭he 17吃瓜在线 will stay in close coordination with our members regarding supply chain impacts stemming from the collapse of the Francis Scott Key Bridge,鈥 said 17吃瓜在线 Director of Transportation, Infrastructure and Labor Policy Max Hyman. 鈥淲e also remain engaged with leading federal officials on recovery efforts and will continue to support critical infrastructure projects such as the Port of Baltimore.鈥
PFAS CERCLA Designation Will Harm Manufacturing
In a move that will hinder the growth of manufacturing in the U.S., according to the 17吃瓜在线, 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鈥檚 going on: The addition of two per- and polyfluoroalkyl substances, or PFAS, to the federal list 鈥渕eans 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.鈥
- 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鈥檚 in it: 鈥淭he rule requires entities to immediately report releases of PFOA and PFOS that meet or exceed the 鈥榬eportable quantity鈥 to the National Response Center, state or tribal emergency response commission, and the local or tribal emergency planning committee, according to the EPA.鈥
Why it鈥檚 problematic: 鈥淸T]his unprecedented use of CERCLA authority by the EPA will only hamper President Biden鈥檚 vision of growing the manufacturing sector in the U.S.,鈥澛 17吃瓜在线 Managing Vice President of Policy Chris Netram , adding that manufacturers support smart efforts to remove harmful substances from the environment.
- 鈥淭he unique and unmatched chemical bond of these compounds means that there are no existing replacements for the critical products they make up.鈥
- Furthermore, the overly broad designation of PFOA and PFOS as hazardous 鈥渨ill make it harder for our industry to create innovative products and jobs.鈥
Manufacturing Output Slows
Manufacturing output slowed in April, according to index provider .
What鈥檚 going on: While overall business activity continued to grow this month鈥攁lbeit at a slower pace鈥攎anufacturing growth eased.
- S&P Global鈥檚 Flash US Manufacturing PMI came in at 49.9, a four-month low and down from March鈥檚 51.9.
- Any number below 50 indicates contraction.
Why it鈥檚 happening: The decline in orders can be linked 鈥渢o inflationary pressures, weak demand and sufficient stock holdings at customers.鈥
However 鈥 Employment in manufacturing in April rose modestly.
What it means: 鈥淸T]he drivers of inflation have changed,鈥 said S&P Global Market Intelligence Chief Business Economist Chris Williamson. 鈥淢anufacturing 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.鈥
17吃瓜在线 Helps Strike Forced IP Transfer from WHO Draft
In a significant change that protects manufacturers鈥 intellectual property rights, an updated draft of the World Health Organization鈥檚 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吃瓜在线, and this week鈥檚 announcement represents significant progress for manufacturers.
What鈥檚 going on: 鈥淭he latest text has scrapped a clause stating countries will 鈥榗onsider supporting鈥 time-bound suspensions of intellectual property rights during pandemics. Instead, each country will consider supporting 鈥榓ppropriate measures鈥 to scale up the manufacture of products that could help stymie a future pandemic.鈥
- 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 鈥渟upport 鈥 capacity-building for the transfer of technology and knowhow for pandemic-related health products on mutually agreed terms.鈥
- The text indicates that the pathogen access and benefit sharing system鈥攚hich would require nations to share pathogen information 鈥渨ith the WHO in exchange for access to the resulting health products developed to fight the new threat鈥濃攊s still under negotiation. Thus far, countries have been unable to agree on the terms of that exchange.
Why it鈥檚 important: IP waivers would significantly harm manufacturers and their ability to compete globally.
- The 17吃瓜在线 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鈥檚 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鈥檚 final Ministerial Declaration last month.
- In addition, in January, the 17吃瓜在线 responded to the U.S. Department of Health and Human Services鈥 request for comments regarding the WHO鈥檚 pandemic preparedness agreement. The 17吃瓜在线 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 鈥渃oordinating financial mechanism,鈥 it does not detail how the mechanism would work.
How Will AI-Run Factories Be Different?
A common theme in science fiction is the fully automated, robotized factory that manufactures nothing but robots. We鈥檙e 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鈥檚 Research-Technology Management magazine.)
Why it鈥檚 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:聽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鈥攁n important safety component that binds seatbelt fasteners to seats as well as seats to the floor of the car鈥攃onsists 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.聽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 .
Making the Business Case for Sustainability
Ecolab鈥檚 mission hasn鈥檛 changed much in more than 100 years. It鈥檚 still 鈥渂ringing science to our customers in a way that drives performance, productivity and less water and energy use.鈥
- That鈥檚 according to Ecolab Chief Sustainability Officer Emilio Tenuta, who says being climate-minded is not only 鈥渢he right thing to do,鈥 but also at the core of the St. Paul, Minnesota鈥揾eadquartered water, hygiene and infection-prevention company鈥檚 operating model.
A dual purpose: 鈥淲e make the business case for why sustainability and [profitability] can go hand-in-hand when it comes to driving solutions,鈥 Tenuta told us recently. 鈥淚t鈥檚 why 48,000 Ecolab associates wake up every morning with the feeling, 鈥榃e鈥檙e making a real difference in the world.鈥欌
- Ecolab鈥攚hich recently announced that 100% of its European operations are now powered by renewable energy sources鈥攈elps millions of customers worldwide reduce their environmental impact while promoting food safety, maintaining clean environments and optimizing resource use.
- 鈥淎t Ecolab, we talk about eROI鈥擡xponential Return on Investment,鈥 Tenuta explained. 鈥淚t鈥檚 about understanding that we have the ability to deliver on a business outcome鈥攑rofitability鈥攚hile also delivering an environmental impact.鈥
Don鈥檛 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.
- 鈥淪ometimes we forget the role that water plays in addressing climate change,鈥 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. 鈥ater doesn鈥檛 necessarily get the same headlines as climate, but if you follow the water, that鈥檚 going to have a lasting impact鈥 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鈥檚 no accident; to the company, caring for the planet goes hand-in-hand with caring for people, Tenuta told the 17吃瓜在线.
Read the full story .
Home Sales Decline
Sales of previously owned homes in the U.S. declined in March, reports.
What鈥s going on:聽鈥淓xisting 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.鈥
- 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鈥s happening: Higher list prices combined with still-elevated mortgage rates continue to make home purchasing difficult for Americans.
What it means:聽鈥淭hough rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,鈥 said NAR Chief Economist Lawrence Yun.
- However,聽鈥淸t]here are nearly six million more jobs now compared to pre-Covid highs, which suggests more aspiring homebuyers exist in the market.鈥
Weight-Loss Drug Shows Potential to Treat Sleep Apnea
A weight-loss drug has shown potential in treating patients with sleep apnea, 听谤别辫辞谤迟蝉.
What鈥檚 going on: Pharmaceutical manufacturer Eli Lilly鈥檚 Zepbound, which is used to treat obesity and diabetes, 鈥渨as 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鈥 from two late-stage clinical trials.
- In October 2022, the Food and Drug Administration gave the medication a 鈥渇ast track鈥 designation for patients with moderate to severe OSA and obesity.
Why it鈥檚 important: 鈥淭he 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.鈥
- Complications of the condition include excessive fatigue, high blood pressure, stroke, heart failure and type 2 diabetes鈥攁nd treatment options are limited.
Meeting an 鈥渦nmet need鈥: 鈥淎ddressing 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,鈥 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.
FTC to Unveil, Vote on Noncompete Ban Next Week
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, 聽(subscription) reports.
What鈥檚 going on: 鈥淎ccording to the FTC鈥檚 announcement, the agency鈥檚 five commissioners will vote April 23 on whether to 鈥榓uthorize public disclosure of the proposed final rule,鈥 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.鈥
- 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鈥檚 important: A noncompete ban would cause disruption to the majority of manufacturing operations in the U.S., a 2023 17吃瓜在线 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鈥攔epresenting manufacturers of all sizes鈥攕aid 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吃瓜在线 says: 鈥淭he FTC鈥檚 proposed rule severely threatens manufacturers鈥 ability to protect intellectual property and responsibly invest in their employees,鈥 said 17吃瓜在线 Director of Transportation, Infrastructure and Labor Policy Max Hyman.
- 鈥淭he 17吃瓜在线 remains on this critical issue for our members and will weigh our options in response to the commission鈥檚 vote next week.鈥