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Member Briefing October 1, 2024

October 1, 2024

Posted By: Harold King in Daily Briefing,

Top Story

East And Gulf Coast Ports Strike, With ILA Longshoremen Walking Off Job From New England To Texas, Stranding Billions In Trade

Billions in trade came to a screeching halt at U.S. East Coast and Gulf Coast ports after members of the International Longshoremen’s Association (ILA) began walking off the job after 12:01 a.m. ET on October 1. The roughly 50,000 of its 85,000 members made good on the threat to strike at 14 major ports subject to a just-expired master contract with the United States Maritime Alliance (USMX). The union and port ownership group failed to reach agreement by midnight on a new contract in a protracted battle over wage increases and use of automation. The 14 ports where preparations for a strike have been underway are Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston.

In a last-ditch effort on Monday to avert a strike that will cause significant harm to the U.S. economy if it is lengthy — at least hundreds of millions of dollars a day at the largest ports like New York/New Jersey — the USMX offered a nearly 50% wage hike over six years, but that was rejected by the ILA, according to a source close to the negotiations. The port ownership group said it hoped the offer would lead to a resumption of collective bargaining.

Read more at CNBC

September Roundup of Economic Indicators for U.S. Manufacturers

Economic reports released in September offer a slightly more optimistic view for manufacturing, though employment in the sector remains a concern. Despite a gloomy jobs report for the sector, several key indicators point to a modest improvement, with gains in output, new orders, and positive growth seen across multiple regions. Here are the Key Numbers from Industrynet:

Manufacturing output rose 0.9% in August, led by the auto sector, while capacity utilization advanced 0.6%.
Manufacturing activity improved slightly, inching up 0.4%, yet with a reading of 47.2% remains in its fifth straight month of contraction.
The Labor Department reports a loss of 24,000 jobs in manufacturing for August.
Prices for the month of August reflected a modest increase of 0.2% month-over-month.
In a surprise rebound following two months of declines, new orders for manufactured jumped 5.0%, reaching $592 billion (July data reported in September)
The latest regional manufacturing surveys were far more positive this month, with the New York region growing for the first time in a year and other regions lifting out of contraction.

Read more at Wells Fargo

China’s Weak Factory Activity Shows Urgency of Stimulus Push

China’s factory activity contracted for a fifth consecutive month in September as the world’s second-largest economy struggles to revive its growth momentum. The official manufacturing purchasing managers’ index came in at 49.8 in September, compared with 49.1 in August, 49.4 in July and 49.5 in June, according to data from the National Bureau of Statistics released on Monday. A PMI reading above 50 indicates expansion in activity, while a reading below that level points to contraction. The data beat the 49.5 expected among economists polled by Reuters.

China’s Caixin PMI was 49.3, compared to 50.4 in August, according to the private survey compiled by S&P Global. The Caixin data released on Monday indicated that China’s manufacturing sector experienced its sharpest contraction in 14 months in September, driven by declining demand and a weakening labor market. Headwinds for the manufacturing sector has continued to mount as a prolonged economic slowdown and property crisis dampen domestic demand. Meanwhile, Western restrictions on Chinese exports, including electric vehicles, has added to concerns.

Read more at CNBC

Global Headlines

Middle East

Ukraine

Other Headlines

Policy and Politics

Fed's Powell Says Rates Will 'Over Time' Reach Neutral Level, Not Preset

The U.S. economy seems poised for a continued slowdown in inflation that will allow the Federal Reserve to cut its benchmark interest rate and "over time" reach a level that is no longer holding back activity, Fed Chair Jerome Powell said on Monday in remarks that showed no obvious lean towards a faster or slower pace of reductions in borrowing costs. "Disinflation has been broad-based, and recent data indicate further progress toward a sustained return to 2%," the Fed's targeted inflation level, Powell said in remarks to a National Association for Business Economics conference in Nashville, Tennessee.

"If the economy evolves broadly as expected, policy will move over time toward a more neutral stance," Powell said. "But we are not on any preset course. The risks are two-sided, and we will continue to make our decisions meeting by meeting. If the economy performs as expected, that would mean two more cuts this year, a total of 50 (basis points) more," Powell said. "We will do what it takes in terms of the speed with which we move."

Read more at Reuters

Navy Pushes To Catch Up To China’s Superiority At Sea

The U.S. Navy is gearing up for a major war in the South China Sea by the end of the decade, reshaping military posture and structure as it aims to catch up to a larger Chinese naval force. Chief of Naval Operations Adm. Lisa Franchetti released a highly anticipated report this month that outlines seven strategies the Navy will follow to ensure the U.S. is prepared for a potential conflict with China by 2027. That’s the date that Chinese leader Xi Jinping has told his forces to be ready for a potential invasion of the self-governing island nation of Taiwan, which Beijing sees as historically part of the mainland.

Franchetti’s strategic plan zeroes in on how the Navy, the key military branch in the event of a South China Sea conflict, can best prepare itself given multiple constraints, including a troubled shipbuilding industry and historically low recruitment. The strategy, focused on speeding up maintenance to retain a larger combat-ready force and deploying new technologies like autonomous drones, has won support from lawmakers on Capitol Hill who oversee the Navy and have been concerned about the U.S. falling behind China.

Read more at The Hill

Federal Bill Would Exempt Some Chip Projects From NEPA Reviews, But What About Micron?

President Joe Biden is expected to sign a bill that would roll back some environmental protections for semiconductor manufacturing projects, according to Politico. The Building Chips in America Act is intended to streamline the federal review process for projects receiving funding under the Chips and Science Act. Under federal environmental protections rules, those projects are considered a “major federal action,” and therefore require a National Environmental Policy Act (NEPA) review. The bill would clarify that certain semiconductor projects don’t qualify as a major federal action and can be exempted from a NEPA review.

That includes projects that have already received necessary permits and are underway, smaller expansions of existing sites and projects that require a state-level review that is as extensive as a NEPA review would be, among other criteria. It also would declare the Department of Commerce as the lead agency to conduct reviews on projects that don’t meet those standards and still require a NEPA review. When it comes to Micron’s planned semiconductor plant in the town of Clay, Onondaga County Executive Ryan McMahon indicated last week that he believes federal intervention could speed the project up, especially as the ongoing environmental review has been blamed for delaying construction.

Read More at City & State

What about everyone else – WSJ Opinion

Health and Wellness

Stressed Out? These 8 Skills Can Help Boost Mood And Reduce Anxiety

It's impossible to eliminate all your stress, but science shows you can learn to manage it better. Over the last 20 years, Judith Moskowitz a research psychologist at Northwestern’s Feinberg School of Medicine, has been researching a set of eight skills and practices to help people increase positive emotions and decrease anxiety, even amid hard times. And she’s developed an online course to teach these skills, a kind of master class in managing stress. “People can absolutely be taught to have positive emotions, even when things seem pretty bleak,” says Moskowitz.

One thing Moskowitz realized early on in her research is that even when they're going through hardship, people still want to talk about positive things, like seeing a lovely sunset or sharing a meal with a friend. And the people who notice more of these bright spots tend to cope better. Moskowitz’s course can immerse you in these skills. NPR has a quick summary.

Read more at NPR

NYS COVID Update

The Governor updated COVID data for the week ending September 27^th.

Deaths:

Weekly: no data
Total Reported to CDC: no data

Hospitalizations:

Average Daily Patients in Hospital statewide: 1,019
Patients in ICU Beds: 121

7 Day Average Cases per 100K population

8.7 positive cases per 100,00 population, Statewide
10.9 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

Election 2024

Industry News

This Garment Maker Is Finding New York Manufacturing Is Back in Style

For years, Ferrara Manufacturing had slowed production of high-end garments and leaned on its military business as many American consumer brands moved production overseas. But demand for apparel made in the U.S. has been picking up more recently, and sites like Ferrara’s plant 2 miles from Midtown Manhattan are getting busier and hiring workers. Ferrara Manufacturing says its revenue is on track to increase 10% in 2024 and more than 30% in 2025 off the new private-label contracts it has signed this year.

The rising hum of the machinery cutting, stitching and moving clothing at the site is one sign that the global forces of geopolitics and nearshoring of supply chains are reaching an industrial corner of New York City that had grown quiet over the years. More apparel brands are signing contracts with the New York-based garment manufacturer for private-label clothing as part of an effort to shore up their supply chains and cash in on consumer demand for goods made in America.

Learn more at The WSJ

Supplies Rushed To Communities Isolated By Helene As Death Toll Rises To Nearly 100

A crisis unfolded in Asheville as officials pledged to get more water, food and other supplies to flood-stricken areas without power and cellular service Monday, days after Hurricane Helene ripped across the U.S. Southeast. The death toll from the storm approached 100. At least 91 people across several states were killed. A North Carolina county that includes the mountain city of Asheville reported 30 people killed.

Gov. Roy Cooper predicted the toll would rise as rescuers and other emergency workers reached areas isolated by collapsed roads, failing infrastructure and widespread flooding. Supplies were being airlifted to the region around the isolated city of Asheville. Buncombe County Manager Avril Pinder pledged that she would have food and water to the city by Monday. Officials warned that rebuilding from the widespread loss of homes and property would be lengthy and difficult. The storm upended life throughout the Southeast. Deaths also were reported in Florida, Georgia, South Carolina and Virginia.

Read more at The AP

How To Help After Hurricane Helene

IBM Expands Quantum Data Center In Poughkeepsie

IBM has announced the completion of its latest expansion of the IBM Quantum Data Center in Poughkeepsie, which operates the highest number of available utility-scale quantum computers at a single location in the world. These systems are a part of the more than a dozen quantum computers offered to global clients via the IBM cloud. To advance its mission of bringing useful quantum computing to the world, IBM has heavily invested in deploying advanced quantum hardware architectures. First introduced late last year, the IBM Quantum Heron processor has now been deployed in IBM’s global Quantum Data Center in Poughkeepsie.

In addition to the two IBM Heron-based computers now available, the additional systems within the IBM Quantum Data Center in Poughkeepsie are now all capable of operating at the level of utility-scale: the point at which quantum computers can run quantum circuits more accurately than classical computers simulating them, the company said. In turn, this opens the possibility to explore new computational territories for global users who are pushing forward the discovery of new quantum algorithms that will unlock quantum advantage.

Read more at Mid-Hudson News

Steel Output Drops for Third Straight Month

Global steel production totaled 77.9 million metric tons during August according to results supplied by the World Steel Association, a notable decline in output even for a typically slow month. The new total signals the third consecutive month of falling tonnage volumes. It is -5.5% lower than the amount reported for July, and -6.5% less than the August 2023 result. Through eight months of activity, 2024 global steel production totals 1.25 billion metric tons, which is -6.5% less than the 2023 January-August total. Earlier this year, World Steel

The drop in output appears to be related to declining demand, as production in major producer nations remains flat or in decline. The World Steel monthly report compiles raw-steel production totals for 71 countries. The group currently forecasts that 2024 global consumption will rise just +1.7% to 1.793 billion metric tons over 2023, about 19 million metric tons less the outlook report issued late last year. In China – where industrial and construction activity remains weak – regulators have imposed new limits to prevent overproduction. The August raw-steel output in China was 77.9 million metric tons, which was -6.42% less than for July and -10.4% less than August 2023. China’s year-to-date steel production total is 691.4 million metric tons, a -3.3% drop versus the eight-month result for 2023.

Read more at American Machinist

Michigan Nuclear Plant Finalizes Federal Loan To Support First Reactor Restart In U.S. History

The Palisades nuclear plant in Michigan has closed a $1.5 billion loan to support the first reactor restart in U.S. history, the Department of Energy announced Monday. Palisades’ owner, Holtec International, hopes to restart the plant in the fourth quarter of 2025, subject to approval by the U.S. Nuclear Regulatory Commission. Holtec is a privately held nuclear technology company headquartered in Jupiter, Florida.

Holtec has completed all major licensing submittals to the NRC, Nick Culp, a Holtec spokesperson said. Culp said. Company executives expect to receive a response from the NRC sometime in 2025, he said. The restart of the reactor at Palisades would mark a milestone for the nuclear industry after a decadelong wave of reactor shutdowns in the U.S. Palisades ceased operations in 2022 as nuclear efforts struggled to compete with cheap and abundant natural gas. Demand for nuclear power is growing as the U.S. seeks carbon-free energy to meet rising electricity demand while meeting its climate goals. The planned restart at Palisades blazed a path for Constellation Energy’s recent decision to bring Three Mile Island back online by 2028.

Read more at CNBC

For This Boeing Family, the Job Is the Same. The Payoff Isn’t

Three generations of Merwin family men have built their careers in Boeing’s BA -2.46%decrease; red down pointing triangle factories. Tony Merwin, a 30-year Boeing veteran who groomed his three sons for jobs there, is considering something he once believed was unthinkable: “Right now, the way this company is, I would not steer my grandkids toward this company.” American factory jobs used to promise a middle-class life for blue-collar workers like Merwin and his sons, now in their 30s. But that is no longer true for many manufacturing workers—even as presidential candidates Donald Trump and Kamala Harris have campaigned on reviving such jobs.

That tension is behind the strike at Boeing, where the average machinist makes around $75,000 and wages haven’t kept up with the cost of living in the Pacific Northwest, now one of the nation’s priciest regions. Workers are seeing real declines in their standard of living, and that is driving a harder line on union contracts at Boeing and elsewhere, said Rep. Adam Smith, (D., Wash.) who has represented the region since 1997. “Your wages simply didn’t keep up with the cost of housing, education, energy, everything,” he said. “It’s not just the wages they are making, but the expense of the world around them.”

Read more at The WSJ

Boeing Suppliers Fear Long-Term Jobs Hit From Strike

Boeing's two-week-old strike has forced aerospace supplier Pathfinder Manufacturing to furlough 14 out of the company's 54 employees, and CEO Dave Trader fears he may need to send more home if the stoppage grinds on. Pathfinder runs a project to attract new recruits to the aerospace industry, and trains them alongside skilled workers at its facility yards away from Boeing's Everett jet factory outside Seattle, the largest manufacturing building in the world.

Besides the 14 workers, the strike has sent high school students training for aerospace careers at Pathfinder back to their regular classrooms, in a double blow to a sector struggling for skilled labor. "We want to keep them on, so we’re trying to help them the best that we can, but at the same time I’m trying to keep this company afloat," said Trader, 60, who has led Pathfinder through most of its 33-year existence. Of nine suppliers contacted by Reuters, five said they had begun placing workers on furlough or holding off on investments. A separate strike at aerospace group Textron highlights broader labor market pressures in the aerospace industry.

Read more at Reuters

DOE Pilot Project to Calculate Emissions Intensity of Certain Industrial Products

The U.S. Department of Energy (DOE) plans to launch a pilot program designed to measure the greenhouse gas (GHG) intensity of certain industrial products. According to the agency, the White House Task Force on Climate, Trade, and Industrial Competitiveness, in partnership with Congress, stakeholders, and trade partners, will work to develop GHG intensity measurement tools and approaches for select industrial products. To support this initiative, the DOE will compile and analyze statistics on the GHG intensity of certain energy-intensive industrial products.

U.S. National Climate Advisor Ali Zaidi added, “For too long, people dismissed industrial emissions – a major source of climate pollution – as too hard to tackle. But the Biden-Harris Administration is changing the game, using all tools in the policy toolbox to accelerate the industrial transformation that we need to meet our climate goals and support good manufacturing jobs in hard-hit industrial communities. We’re now making progress in building the data infrastructure we need to accelerate this clean manufacturing strategy, enabling us to track and propel reductions in industrial emissions and support the competitiveness of clean manufacturing as the emissions intensity of traded goods becomes increasingly important.”

Read more at Clean Technica

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