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Manufacturing shed 2,000 jobs in May, the second month of declines for the industry in the past quarter, according to the Bureau of Labor Statistics.

What’s going on: Manufacturing has added just 10,000 workers year to date, a significant slowdown from the 385,000 and 390,000 employees in 2021 and 2022, respectively.

• However … there were 12,984,000 manufacturing employees in May, just shy of the 12,988,000 in February, the highest number in more than 14 years.

Earnings are up: Average hourly wages of production and nonsupervisory employees in the sector increased 0.6%, from $26.03 in April to $26.19 in May.

• Manufacturing wages saw 4.9% growth in the past 12 months, which is an increase from the 4.7% year-over-year growth in April.

The bigger picture: Overall, U.S. employers added 339,000 new workers in May, an increase from April’s 294,000.

• While the U.S. economy has added 1,570,000 workers through the first five months of 2023—a strong pace—the U.S. unemployment rate increased to 3.7% in May from 3.4% in April.

​​​​​​​​​What’s up: The largest employment gains in manufacturing in May occurred in transportation equipment (up 10,500, including 6,800 for motor vehicles and related parts), electrical equipment, appliances and components (up 2,100), primary metals (up 2,000), chemicals (up 1,700), wood products (up 800) and miscellaneous nondurable goods (up 300).

What’s down: The biggest employment declines in the sector in May occurred in furniture and related products (down 4,000), machinery (down 2,400), fabricated metal products (down 2,300), printing and related support activities (down 2,000) and textile mills (down 2,000), among others.

The NAM says: In May “the labor market remained solid, with wages continuing to increase at healthy paces despite some deceleration from the 40-year highs seen last spring,” said NAM Chief Economist Chad Moutray.

As the Federal Energy Regulatory Commission prepares to issue a final rule that would change the way new energy projects connect to the U.S. electrical grid, some are concerned the regulation may be insufficient, according to E&E News’ ENERGYWIRE (subscription).

What’s going on: “Speeding up the grid connection system is critical for the success of the Biden administration’s signature climate initiatives and for many states’ clean energy goals. Today’s protracted process for linking new energy projects to the transmission system is widely considered one of the chief hurdles to deploying more carbon-free energy.”

The problem: Developers of clean energy undertakings and others say FERC’s coming changes likely won’t have the effect of getting new projects online sooner.

• Some policies—such as the direction of regional transmission lines to study interconnection requests in groups, not individually—have already been implemented to little effect, they say.
• And some potential issues slowing grid connection aren’t covered by the regulations, including grid operators’ difficulty in hiring sufficient numbers of experienced engineers to process all the requests.
• Then there are network-upgrade costs, which “are rising sharply” and may not be “meaningfully address[ed]” by FERC’s proposed rule.

Too long a wait: Before being able to deliver power to businesses and households, new energy projects need to be connected to the transmission system—and getting approval for that connection can take years.

• “As of last year, it took an average of five years for a new energy project in the United States to move through that study process and reach commercial operation, according to the Department of Energy’s Lawrence Berkeley National Laboratory. That’s up from an average of three years in 2015 and less than two years in 2008.”
• What’s more, “[i]n the current interconnection process in most of the United States, projects are sometimes restudied up to 10 times before they’re approved to connect,” one source told ENERGYWIRE.

Prioritizing projects: The proposed regulation tries to prioritize projects by commercial viability and construction readiness to cut down on the number of “possible” projects in the lineup.

• However … some in the renewables industry say “it’s unrealistic to expect project developers to have most of their permits and contracts in place before they have gone through the interconnection process,” another source told the news outlet.

A fundamental change: FERC has its work cut out for it given the foundational changes that have taken place in the U.S. energy system in the past few decades.

• “Historically, the electric grid was dominated by large, centralized power plants. But as the clean energy transition continues,” that is likely to change.

The NAM’s take: “Manufacturers depend on access to reliable and affordable energy to expand—which is why we support reforms that would foster transparent, streamlined and timely federal regulatory processes for the siting, permitting and licensing of energy delivery infrastructure of all types,” said NAM Vice President of Energy and Resources Policy Brandon Farris.

Advanced nuclear reactors got some good news Wednesday when a measure to speed their development and deployment passed the Senate Environment and Public Works Committee, according to E&E News’ GREENWIRE.

What’s going on: “The ‘Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act,’ S. 1111, passed 16-3, with Chair Tom Carper (D-Del.) and ranking member Shelley Moore Capito (R-W.Va.) leading the effort to revitalize American leadership on nuclear energy.”

What it would mean: Through a series of awards, the bill would encourage companies to develop advanced-reactor technology. In addition, it would seek approval easing for reactor projects on brownfield sites, land that is underused or has been abandoned because of industrial waste.

• “The proposal would also give the Nuclear Regulatory Commission, the nation’s chief nuclear regulator, additional authorities to increase hiring. Lawmakers say current staffing is not enough to effectively deal with the high number of applications for new reactors.”
• And it would supplement “early licensing work” to deploy the reactors more quickly “at critical national security infrastructure sites.”

Some manufacturers are reconsidering their dependence on China in the face of growing security concerns and worries about potential military conflicts, according to The Wall Street Journal (subscription).

What’s going on: “Executives are plotting alternate supply chains or devising products that can be made elsewhere should China’s hundreds of thousands of factories become inaccessible. That prospect became more conceivable, they said, after the 2022 invasion of Ukraine prompted companies to sever ties with Russia, sometimes taking huge write-downs.”

• China’s government recently banned key Chinese firms from purchasing products made by U.S. semiconductor firm Micron Technology, saying the company posed a national security risk to China.

Why it’s important: “China’s access to raw materials and ability to produce components for finished goods remains unmatched, and its dense supplier networks have yet to be replicated elsewhere.”

What manufacturers are doing: Some manufacturers that rely heavily on China for revenue and inputs are using extra discretion when it comes to their data and intellectual property in that country.

• Manufacturers’ caution levels have risen since April, when China revised an espionage law that lets its authorities inspect the facilities and electronic equipment of any companies they suspect of spying.
• Some manufacturers are aiming to assemble new supply chains to circumvent China. These companies are “brac[ing] for higher prices and slower service than [they receive] in China” but “won’t be cut off by the threat of war or a trade embargo.”​​​​​​​

The bill passed in the House Wednesday to raise the nation’s debt limit and avert a default makes some of the most significant revisions to U.S. environmental law in years, “potentially accelerating new renewable-energy investments championed by the Biden administration,” according to The Wall Street Journal (subscription).

What’s going on: The Fiscal Responsibility Act, which boosts the U.S. debt ceiling until after the 2024 presidential election and now heads to the Senate, includes several energy infrastructure-related moves.

• Expedites permitting for MVP: The legislation hastens permitting for the Mountain Valley Pipeline, an Appalachian natural-gas project that would bring affordable energy to the Mid- and South Atlantic regions.
• Shortens timelines: It also “tightens the scope of environmental reviews required under the National Environmental Policy Act of 1970 and allows more projects to win approval without having to undergo the most complex types of reviews. It also sets time limits of no more than two years to complete the studies.”
• Streamlines processes: In addition, the bill assigns review of each project to one federal agency rather than multiple agencies and allows infrastructure undertakings “to piggyback on existing reviews for similar projects rather than starting from scratch.”

“Unlocking resources”: Rep. Garret Graves (R-LA), who joined NAM President and CEO Jay Timmons at the recent NAM Competing to Win Tour stop in Harahan, Louisiana, and who wrote a previous measure from which the Fiscal Responsibility Act drew, said the legislation is “all about unlocking America’s resources.” This is a point the NAM has long stressed to Congress, too.

• On Tuesday, after the NAM consistently applied pressure on lawmakers to reach a deal, Timmons urged the House to pass the measure, citing its ability “[t]o strengthen manufacturing in our nation, reach our industry’s full potential and outcompete other nations like China” through permitting reforms.
• Bureaucracy and red tape hamstring plans for critical infrastructure, resulting in “yearslong delays on energy projects, making them unfeasible. The most rigorous type of review takes an average of 4½ years to complete, according to the White House,” the Journal reports.

Something we can all agree on: “‘We see an enormous amount of demand for new clean energy projects that are being held up,’ said Sasha Mackler, who directs the energy program at the Bipartisan Policy Center. ‘That reality has brought Republicans and Democrats together here.’”

How will AI change the work you and your employees do? The Manufacturing Leadership Council—the digital transformation arm of the NAM—is helping manufacturing leaders figure out the opportunities created by new generative AI technologies, including ChatGPT.

Recently, the MLC held a Decision Compass discussion to help manufacturers learn how to take advantage of these new tools safely and effectively.

The participants: The conversation was led by two members of West Monroe’s Center of Excellence for AI: Ryan Elmore and David McGraw. Elmore and McGraw shared their expertise and addressed questions from manufacturers throughout the call.

The use cases: AI is a diverse and complex tool that is likely to have a lasting impact on manufacturers across the United States. According to McGraw and Elmore, there are a range of applications for the technology, from supply chain optimization and production planning to predictive maintenance issues.

The workforce impact: According to Elmore, AI will also transform the manufacturing workforce.

• Some roles that involve repetitive tasks like data processing could be adjusted or eliminated, while some new jobs will be created around tasks like prompt engineering, which ensures AI programs deliver the most useful and accurate results. Most importantly, however, existing jobs will likely be modified to account for new tools.
• “Some are going to go away, some are going to be created, but the vast majority is going to change mentality, change infrastructure, change the way we work,” said Elmore.

Learn more: Want to find out more about how digital tools are changing manufacturing? The MLC will delve deeper into these issues at this year’s Rethink Summit, taking place June 26–28 in Marco Island, Florida. Learn more and register here.

Read the full story here.

The NAM is leading a coalition of business groups in advocating against a potential new overtime rule from the Department of Labor.

The background: The current overtime rule, part of the Fair Labor Standards Act, mandates that employees must receive overtime pay of at least time and a half for hours worked over 40 in a workweek.

• However, it contains certain exemptions for white-collar workers. If an employee makes a minimum amount of money or is classified as an executive, administrator or professional, they are exempt from overtime pay.

The new rule: The new rule is expected to raise the salary threshold from the current $35,568 per year.

• ​​​​​​​The change would potentially cause challenges for employers, as well as for employees who have worked to advance themselves away from hourly jobs and into salaried company positions, as the NAM has long argued.
• In addition, the widespread adoption of hybrid work brought about by the pandemic “makes compliance with potential changes to the white-collar exemptions measurably more difficult,” the coalition pointed out. New regulations may force employers to restrict these work arrangements that many workers value highly.

The last word: As the coalition told the Department of Labor, “Many businesses are not well-positioned to absorb new labor costs associated with changes to the overtime pay regulations, and such changes would only exacerbate the difficulties businesses are currently facing”—including inflation, supply chain disruptions and the aftereffects of the pandemic.

The debt ceiling bill finalized on Sunday—and set to go to a vote in the House this evening—includes meaningful permitting reform measures, according to E&E News (subscription).

What’s going on: The legislation would approve the Mountain Valley pipeline and enact changes to the National Environmental Policy Act.

• In addition, “a one-year deadline would be placed on the production of environmental impact assessments for new energy projects seeking permits. A two-year maximum would be applied for environmental impact statements.”
• “The agreement would also expand an existing program to expedite federal permitting for infrastructure projects, known as Fast-41.”
• And last, though the bill will not include provisions for a large-scale transmission buildup, it will call for a study of grid challenges and recommendations that might fix them.

The NAM says: NAM President and CEO Jay Timmons commended policymakers on reaching an agreement:

• “Manufacturers have been a leading voice for permitting reform, so we are encouraged that this legislation takes critical steps to improve our broken permitting system, helping us more fully leverage our domestic energy sources and expand manufacturing in the United States.”
• “We will work with Congress and the administration to build on this progress and create a comprehensive bipartisan permitting reform package that also helps unlock the full potential of laws meant to encourage the growth of manufacturing in America, such as the historic infrastructure law and the CHIPS and Science Act.”

The bigger bill: In case you missed it, the debt legislation as a whole would suspend the borrowing limit for the next two years, while also making some spending cuts, according to The Wall Street Journal (subscription).

• “It would cut spending on domestic priorities favored by Democrats while boosting military spending by about 3%. It also would extend limits on food assistance to some beneficiaries to prod them to find jobs.”

NAM in the news: Timmons’ statements on the debt-limit agreement were picked up by CNN Business and The Hill.

The Creators Wanted Tour, a joint project of the NAM and the Manufacturing Institute, set new records at the “Greatest Spectacle in Racing”: the Indianapolis 500.

By the numbers: The tour’s 17th stop, generously sponsored by Snap-on, allowed nearly 1,600 young fans and their families to experience modern manufacturing firsthand.

• In addition, more than 72,000 students and career mentors signed up online to learn more about manufacturing careers.
• So far, more than 10,000 students have taken part in the immersive experience since its launch in October 2021, with 84% of participants reporting an improved view of modern manufacturing careers. Online signups have now surpassed 1.3 million.

What they’re saying: “‘Creators Wanted’ is a critical message to all young people, parents, caregivers and educators across our country,” said Snap-on Chairman and CEO Nick Pinchuk, who is also an NAM Executive Committee member and MI board member.

• “Snap-on is proud to bring the Creators Wanted Tour to the [Indianapolis Motor Speedway] and the Indianapolis 500, showing younger race fans and their families that manufacturing is an exciting place where the opportunities are many, the careers are rewarding and the lives are filled with the pride of being part of something greater than yourself,” he continued.
• NAM President and CEO and MI Chairman of the Board Jay Timmons added, “The world’s largest single day sporting event met the nation’s largest manufacturing campaign—and it revved up enthusiasm about modern manufacturing in a big way with more students and their families.”

Behind the scenes: Alongside the Creators Wanted experience at Fan Midway at the IMS, fans were also treated to a number of other interactive exhibits.

• These included Snap-on’s “Makers and Fixers” tent; Honda’s racing simulator and vehicle fleet; the IMS Kidzone where kids raced on their own track; and FactoryFix’s activities and resources to help people find their path into manufacturing careers, including its work through CreatorsWanted.org.
• “Seeing folks at Indy curious about our Creators Wanted campaign was such a great confirmation of the research and testing we did to arrive at the name for this effort,” said NAM Executive Vice President Erin Streeter. “When parents and kids asked us about the type of creators we need in manufacturing, it just showed how spot-on our message really is.”
• The NAM video team captured some of the fan sentiment with this video.

The big picture: “These tour stops often serve as the first interaction individuals have with the NAM and the MI, and the impression is powerful,” said NAM Managing Vice President of Brand Strategy Chrys Kefalas.

• “People see us actively promoting manufacturing careers and aiding job seekers, reinforcing our commitment to U.S. competitiveness. These meaningful personal interactions create lasting impressions and underscore the industry’s value.”

What’s next: After a thrilling Indy 500, where more than 300,000 attendees who saw Josef Newgarden secure a dramatic victory, the tour looks forward to its next stop at the SkillsUSA National Leadership & Skills Conference in Atlanta, Georgia, June 20–22.

In its Sackett v. EPA ruling yesterday, the Supreme Court handed a victory to congressional Republicans and others who believe the Biden administration’s revised Waters of the United States rule is overly broad, according to E&E News’ Greenwire (subscription).

What’s going on: By unanimous vote, “the court found that EPA and the Army Corps of Engineers wrongfully claimed oversight of the wetland on the Sacketts’ property—located about 300 feet from Idaho’s Priest Lake—and that federal courts had erred in affirming the agencies’ jurisdiction.”

• “The ruling could complicate the Biden administration’s legal defense of its new definition of which wetlands and streams qualify as ‘waters of the U.S.,’ or WOTUS, subject to Clean Water Act permitting.”
• The Sacketts have been prohibited from building on their property for more than 15 years because of the wetlands designation and oversight claims.

Why it’s important: The decision—in which “[t]he court said the EPA can only assert jurisdiction over wetlands that have continuous surface connection to navigable waters, rejecting a more expansive view proposed by the EPA,” according to The Wall Street Journal (subscription)—will give much-needed regulatory certainty to manufacturers, which have been caught in limbo over the unclear and changing WOTUS definition.

The NAM says: The court’s ruling “put[s] us on a path to regulatory certainty for manufacturers across the country,” NAM Vice President of Energy and Resources Policy Brandon Farris said.

• “This case demonstrates yet again why manufacturers and our economy need a sensible Waters of the United States proposal that provides clarity and certainty and allows the industry to continue leading the way on environmental protection. The EPA should heed the court’s ruling and revise its latest WOTUS proposal.”