WASHINGTON – More than 80 years ago, during the Great Depression, thousands of unemployed Americans traveled from far and wide to the border of Arizona and Nevada, hoping to land a precious job building and operating one of the nation’s great engineering wonders, the Hoover Dam.
Today, however — even with millions of Americans unable to find a job — that lasting symbol of worker pride and strength no longer is attracting the attention of America’s skilled workforce.
A wave of retirements is about to hit Hoover. Two-fifths of the dam’s current employees will be eligible for retirement in the next five years, leaving the government scrambling to fill 40 upcoming vacancies.
The Interior Department agency that oversees Hoover is moving to fast-track hiring for its department-wide openings. But the dam’s aging workforce, mostly baby boomers closing in on retirement age, are part of a specialized group of hydroelectric engineers and electricians with a skill set not widely taught or available across much of the country, spokeswoman Rose Davis told FoxNews.com.
“It’s an interesting choreography at the dam,” she said, noting the next batch of workers will have to ditch their high-tech training tools and approach fixes using classic engineering techniques.
“It’s hands-on training,” said Davis, with the department’s Bureau of Reclamation. “We teach mechanics and hydro electricians how the dam works. If the signals go off, this is what it means. Do you hear something funny? Do you smell something funny? We teach them to fix generators from the 1930s.”
Hiring at the massive dam-turned-tourist attraction has slowed significantly in recent years, with the biggest blows coming during last year’s partial government shutdown and the sequester — a series of automatic budget cuts that went into effect on March 1, 2013.
The Hoover Dam, located 30 miles southeast of Las Vegas, was constructed in the 1930s and is considered one of the country’s finest engineering and architectural achievements. Located on the border of two states, the structure harnesses the power of the Colorado while creating America’s largest reservoir. It provides billions of kilowatt-hours of hydroelectric power to residents of Nevada, Arizona and California — and the lake supplies water to those states.
Towering at 726 feet high and 1,244 feet long, the dam was one of the largest man-made structures in the world when it was constructed. Contractors were given seven years to construct the 6.6 million-ton barrier. They finished it in five, with a total workforce of 21,000.
But the folks tasked with keeping the site operational today are dwindling – a stark reminder not lost on Interior Secretary Sally Jewell when she visited the area in December.
During a tour of the control center for the Hoover, Parker and Davis dams, Jewell, 58, noticed it was being run by two men – the younger being her age.
“I’d like to say that was a good thing, but it really isn’t very good,” The Las Vegas Review-Journal reported her saying.
Instead, engineers who have retired are now being rehired as consultants to teach a new generation of workers how to handle turbine generators and other equipment crucial to the day-to-day operation.
“The older (worker) had retired and was brought back as what we call a returning annuitant,” Jewell said. “Lives in Alabama. Flies back once a week to take his turn running Hoover Dam.”
At Rowan University in New Jersey, which houses a popular engineering program, spokesman Joe Cardona explained that the Nevada site is “a very niche industry.”
“You are not going to find someone teaching 1930s technology so what’s happening at the Hoover Dam is that they are partnering with local universities in Arizona and Utah to find fits for these spots,” he said.
It’s not to say that the Hoover Dam hasn’t received any upgrades. It has.
Most recently, the government commissioned a new wide-head turbine for the dam’s N8 unit which almost immediately produced a 2 percent efficiency gain. Other improvements include replacing old cast-steel wicket gates with new stainless steel ones that open wider to allow more water in with more force.
Six of the dam’s 17 turbine generators have gotten upgrades since 2005.
But another problem plaguing the Reclamation department is retention.
As of December, 140 of the 800 employees working in the Reclamation’s Lower Colorado Region were eligible to retire in less than five years.
“The millennials are hardest to keep,” Davis said. “We lose a lot of people to the private sector. This includes everyone from human resources to engineers, who may think, ‘I might need to move to the private sector to get my next raise.’”
Some of the engineering jobs — including those in the mechanical, civil and electrical fields — listed under the Bureau of Reclamation on USAJOBS.gov offer salaries exceeding $90,000 for workers with more experience. The jobs, though, can pay as low as roughly $40,000 for those with less experience, depending on the position and location.
Still, Davis said finding workers for the Hoover location – a national landmark only a short drive from Las Vegas – is much easier than filling spots in more remote areas. Next door in California, state officials have been struggling to fill posts and retain workers for the vast State Water Project, a massive water and power system.
Chris McManes, a spokesman for the Institute of Electrical and Electronics Engineers, told FoxNews.com that making sure specialized jobs like the ones at Hoover are backfilled is pivotal.
“When it comes to hydroelectric power generation and power engineering in general, IEEE-USA is concerned that we have an adequate supply of younger electrical engineers ready to fill the jobs of people who are retiring,” he said.
TPP: What's At Stake With The Trade Deal?
in Uncategorized/by MAM TeamUS President Barack Obama’s trip to Asia this week and his meetings with Japanese Prime Minister Shinzo Abe and South Korean President Park Geun-hye present an important opportunity to refocus attention on the TPP.
It is the most significant trade agreement the US is negotiating, representing 40% of world trade and a destination for over 60% of US exports.
As importantly, the TPP is strategically significant as it is the economic dimension of a broader US rebalancing towards Asia.
The two largest economies involved in the TPP are the US and Japan. Their intensive bilateral discussions have been aimed at liberalising each other’s markets for a range of goods in sensitive areas such as agricultural products and cars.
Progress in US-Japan discussions will significantly improve prospects for concluding the TPP. Mr Obama should use his trip to Tokyo this week as an opportunity to push Mr Abe to liberalise faster.
More countries may also potentially join the trade grouping. South Korea is not a TPP member, but Ms Park has indicated the country’s desire to join.
China’s views of the TPP will also be discussed in Tokyo and Seoul. The US has made it clear that China is welcome to join the TPP if it can demonstrate a willingness to live up to the rules being negotiated.
This reflects the strategic dimension of the TPP – to be a template for economic growth in the region.
Over the last 12 months, most of the sticking points that Japan had against joining the TPP seem to have been resolved.
On the five so-called “sacred” agricultural products, the US has already agreed to let Japan keep its tariff on rice, wheat and sugar in exchange for Japan taking non-tariff measures to increase the imported quantities. On beef, Japan seems to have gotten away by agreeing to lower tariffs by 9% in the distant future. Negotiations are still ongoing about the tax restrictions on pork.
The domestic political climate also favours Mr Abe. The rival opposition party, the Democratic Party of Japan, promoted the TPP while it was in power. Among major opposition parties, the Japanese Communist Party is the only one who has been consistently against the TPP.
According to a poll by Japan’s public broadcaster NHK, 31% of people supported joining the TPP, while 14% were against it and 45% said they were indifferent.
Japan’s government estimates the economy will expand by 0.66% as a result of the elimination of tariffs. When we include non-tariff deregulation, the economic benefit will be much larger, probably to the tune of 2% to GDP.
Beyond economic pluses and minuses, the TPP brings forth a much broader and compelling national interest as far as Japan is concerned. With geo-political pressure from China intensifying, it is also in Japan’s interest to solidify its alliance with the US and other Asia-Pacific nations.
While I believe any political arrangement to isolate China would be neither wise nor feasible, a strong economic alliance among Asian countries would be a good bargaining chip to convince China towards a friendlier and mutually beneficial relationship with Japan.
Japan should and is ready to embrace the TPP.
China stands to gain considerably by joining the TPP. Most immediately, it would add China to a growing coalition of countries co-operating to increase trade and investment across dimensions that have been frustrated in traditional multilateral forums.
Moreover, joining negotiations with high ambitions provides China greater scope for defining its own form of participation than abstaining and joining later, after an agreement is reached by earlier members.
An omission as notable as China’s weakens the total benefits of any agreement reached. In addition to helping the TPP build momentum, Beijing throwing its weight behind the TPP would also help frame China as a meaningful advocate for reform and positive change.
Over the past few years economic growth in China has slowed by about one-quarter as debt ballooned.
The TPP’s focus on services, investment and government procurement, among other trade issues, would dovetail nicely into China’s current efforts to reform its economy. This includes managing local government debt while growing social services offered to a larger share of rural-urban migrants.
China joining the TPP would offer immediate reputational benefits, and plant the seeds for boosted economic activity once an agreement is reached.
Given China’s ambitions, abstaining from the TPP would not only be a conspicuous omission, it could also sow the seeds for slower investment and services trade activity in the future, given stronger policy incentives elsewhere.
Vietnam is set to gain the most from the TPP due to the potential for a greater share of the apparel and footwear market, particularly in the US and Japan.
In 2012, Vietnam exported almost $7bn (£4.2bn) worth of apparel to the US, which accounted for 34% of US apparel imports. Vietnam also exported $2.4bn worth of footwear.
The TPP will allow Vietnam to export apparel to the US at a 0% tariff rate, which will make Vietnamese exports even more competitive.
Vietnam enjoys several competitive advantages, such as low labor costs, and benefits from being closer in proximity to major textile exporters China and South Korea. It also enjoys strong government support such as subsidies on financing, energy and trade promotion.
This is unlike most US free trade agreements which adopt a “yarn-forward rule”, which states that yarns used to make the textile or apparel must have been produced in the TPP country.
The yarn-forward rule benefits the US yarn and fabric industry because it exports yarn and fabrics to TPP countries like Vietnam. The industry accounts for two million jobs in the US.
However, the “yarn-forward rule” does not benefit Vietnam since most of its yarns and fabrics are sourced from China and South Korea, which are non-TPP countries.
There are other challenges that would have an impact on Vietnam. TPP rules relating to state-owned enterprises may affect the government’s dominance in the garment industry.
According to the US Congressional Research Service, Vinatex, which is owned by the Vietnam government, reportedly accounts for 40% of apparel production and 60% of textile production.
It remains an open question as to whether the TPP rules will prompt greater privatization of the sector.
Adidas and Nike Supplier Goes on Strike in China, Halting Output
in Uncategorized/by MAM TeamWorkers at the shoemaker, a supplier to companies including Adidas AG and Nike Inc. continued to strike for a seventh day, disrupting output, spokesman George Liu said today. Yue Yuen, based in Hong Kong, offered to add a monthly living allowance of 230 yuan ($37) at its factories in southern China starting May 1, Liu said yesterday. It also agreed to bring forward to next month a social-security benefit plan originally scheduled for 2015, he said.
Workers have disrupted production in Yue Yuen’s Dongguan factory complex, which employs more than 40,000 people, since April 14 in a dispute over pay, benefits and the right to pick their own union. More than 50 percent of the workers were on strike today, Liu said. China Labour Watch, which estimated the striking workers at about 30,000, said a small number had returned to work, without quantifying it.
Employees were seen coming to the plant, clocking in and then leaving yesterday. Some workers, who asked not to be identified because they or their family members could lose their jobs, said yesterday that they were still on strike.
Rising CostsThe labor dispute adds challenges to Chinese manufacturers faced with disruptions as wages climb and workers demand better compensation. Rising costs have also prompted some employers to move production abroad.
Employees interviewed at the factory yesterday and on April 19 said the company had failed to agree on demands for more pay, a change in contract status and reimbursement for unpaid benefits contributions. Some demanded no punishment for strikers and the right to elect their own union leaders.
At least 80 percent of the workers won’t take the offer, said Xiang Feng, 28, a worker in the factory’s finance department. The company’s plan to raise monthly contributions for social security would make it compulsory for employees to boost their own share of payments, she said.
“Workers may end up with a take-home salary almost unchanged or maybe even lower than before,” Xiang said.
More DemandsThe strikers expanded demands after an initial dispute over contributions to government-mandated social security and housing benefits for workers. The local government is fully aware and supportive of Yue Yuen’s proposed plan, Liu said.
Monitoring group China Labour Bulletin said on its website strikers at the Dongguan facility numbered at least 10,000, while Yue Yuen said April 16 that more than 1,000 were striking. Wal-Mart Stores Inc. and International Business Machines Corp. faced strikes earlier this year in China by workers demanding better compensation.
China’s wages are set to increase by 10 percent or more in 2014, driving more low-cost manufacturers out of the country and boosting consumption, according to analysts at firms including Bank of America Corp.
Nike has produced more shoes in Vietnam than in China since 2010. Adidas said in 2012 it would close the last factory it owned in China.
Riot PolicePolice with riot gear and dogs were present outside Yue Yuen’s 1.4 million-square-meter (15 million square-foot) Dongguan complex yesterday. Dozens of workers were taken away by police last week, the official Xinhua News Agency reported April 17, without saying why the workers were taken. No one was injured and there were no clashes, Xinhua reported.
Police have told workers not to congregate around the factory, said three workers who asked not be identified because they or their family members could lose their jobs.
Taiwan-based Pou Chen Group, the shoemaker’s parent company, is in discussions with the local government to resolve the striking workers’ concerns and an investigation will be conducted as soon as the strike ends, Adidas China said in an e-mailed statement April 18.
Nike is aware of and concerned by the events and is “continuing to monitor the dialog between factory management and the workers, as well as production at the factory,” the Beaverton, Oregon-based company said by e-mail on April 18.
Operations at a Yue Yuen factory in Jiangxi province in eastern China have returned to normal today after a production disruption, Liu said. Workers began a strike April 18 because they didn’t want to pay social security insurance, he said.
Yue Yuen, which had 423,000 employees as of 2012, was founded in 1988 by Taiwanese owners and has factories in China, Vietnam and Indonesia, according to its website.
Learn How One American Manufacturer Is Fighting to Keep Jobs in the USA
in Uncategorized/by MAM TeamWhen an American made product is purchased by a consumer it means they have given manufacturers a reason to keep jobs in the USA. Keeping Americans employed means working class families have money for education, homes, and yes home resort items such as spas that were not previously afforded. It is amazing how buying American made products can trigger a positive economic cycle which will eventually have an upward effect on the quality of life for Americans across the nation and it all can be done by purchasing products that are Made in the USA.
Small or large any purchase of products Made in the USA helps a member of an American community flourish. By encouraging consumers to make a conscience decision to buy American made products, Coleman® Spas will help build the economy and rejuvenate the strength and determination of the American spirit.
To learn more about Coleman® Spas visit www.colemanspas.com. Members of the media interested in speaking with a Coleman® Spas representative contact Amy Malone, amalone@colemansale.com or 909-620-0480.
About Coleman® Spas
The Coleman® story began over 114 years ago when W.C. Coleman began manufacturing lanterns in Wichita, Kansas. Since then, Coleman® has built its trusted reputation based on its beliefs that nothing is really sold until it gives 100% satisfaction and that every Coleman® product must be the best of its kind. Customers trust that Coleman® products will provide all the comforts of home on any dark and cool night under the stars. Coleman® has been a respected name in the world of outdoor recreation for decades and has gained a solid reputation with consumers by manufacturing the world’s best camping products.
The same innovation and exploration that ignited Coleman® lanterns has inspired the creation of the Coleman® Spas collection. Coleman® Spas are manufactured in the United States with cutting-edge technology and affordability. Coleman®Rugged Rotomold Spas, Acrylic Spas and Swim Spas are built with quality and can be trusted to last from generation to generation. Buy Coleman® Spas and buy with confidence.
Dam Shame: Hoover’s Workforce Nears Retirement – Gov’t Scrambles To Fill Jobs
in News/by MAM TeamA wave of retirements is about to hit Hoover. Two-fifths of the dam’s current employees will be eligible for retirement in the next five years, leaving the government scrambling to fill 40 upcoming vacancies.
The Interior Department agency that oversees Hoover is moving to fast-track hiring for its department-wide openings. But the dam’s aging workforce, mostly baby boomers closing in on retirement age, are part of a specialized group of hydroelectric engineers and electricians with a skill set not widely taught or available across much of the country, spokeswoman Rose Davis told FoxNews.com.
“It’s an interesting choreography at the dam,” she said, noting the next batch of workers will have to ditch their high-tech training tools and approach fixes using classic engineering techniques.
“It’s hands-on training,” said Davis, with the department’s Bureau of Reclamation. “We teach mechanics and hydro electricians how the dam works. If the signals go off, this is what it means. Do you hear something funny? Do you smell something funny? We teach them to fix generators from the 1930s.”
Hiring at the massive dam-turned-tourist attraction has slowed significantly in recent years, with the biggest blows coming during last year’s partial government shutdown and the sequester — a series of automatic budget cuts that went into effect on March 1, 2013.
The Hoover Dam, located 30 miles southeast of Las Vegas, was constructed in the 1930s and is considered one of the country’s finest engineering and architectural achievements. Located on the border of two states, the structure harnesses the power of the Colorado while creating America’s largest reservoir. It provides billions of kilowatt-hours of hydroelectric power to residents of Nevada, Arizona and California — and the lake supplies water to those states.
Towering at 726 feet high and 1,244 feet long, the dam was one of the largest man-made structures in the world when it was constructed. Contractors were given seven years to construct the 6.6 million-ton barrier. They finished it in five, with a total workforce of 21,000.
But the folks tasked with keeping the site operational today are dwindling – a stark reminder not lost on Interior Secretary Sally Jewell when she visited the area in December.
During a tour of the control center for the Hoover, Parker and Davis dams, Jewell, 58, noticed it was being run by two men – the younger being her age.
“I’d like to say that was a good thing, but it really isn’t very good,” The Las Vegas Review-Journal reported her saying.
Instead, engineers who have retired are now being rehired as consultants to teach a new generation of workers how to handle turbine generators and other equipment crucial to the day-to-day operation.
“The older (worker) had retired and was brought back as what we call a returning annuitant,” Jewell said. “Lives in Alabama. Flies back once a week to take his turn running Hoover Dam.”
At Rowan University in New Jersey, which houses a popular engineering program, spokesman Joe Cardona explained that the Nevada site is “a very niche industry.”
“You are not going to find someone teaching 1930s technology so what’s happening at the Hoover Dam is that they are partnering with local universities in Arizona and Utah to find fits for these spots,” he said.
It’s not to say that the Hoover Dam hasn’t received any upgrades. It has.
Most recently, the government commissioned a new wide-head turbine for the dam’s N8 unit which almost immediately produced a 2 percent efficiency gain. Other improvements include replacing old cast-steel wicket gates with new stainless steel ones that open wider to allow more water in with more force.
Six of the dam’s 17 turbine generators have gotten upgrades since 2005.
But another problem plaguing the Reclamation department is retention.
As of December, 140 of the 800 employees working in the Reclamation’s Lower Colorado Region were eligible to retire in less than five years.
“The millennials are hardest to keep,” Davis said. “We lose a lot of people to the private sector. This includes everyone from human resources to engineers, who may think, ‘I might need to move to the private sector to get my next raise.’”
Some of the engineering jobs — including those in the mechanical, civil and electrical fields — listed under the Bureau of Reclamation on USAJOBS.gov offer salaries exceeding $90,000 for workers with more experience. The jobs, though, can pay as low as roughly $40,000 for those with less experience, depending on the position and location.
Still, Davis said finding workers for the Hoover location – a national landmark only a short drive from Las Vegas – is much easier than filling spots in more remote areas. Next door in California, state officials have been struggling to fill posts and retain workers for the vast State Water Project, a massive water and power system.
Chris McManes, a spokesman for the Institute of Electrical and Electronics Engineers, told FoxNews.com that making sure specialized jobs like the ones at Hoover are backfilled is pivotal.
“When it comes to hydroelectric power generation and power engineering in general, IEEE-USA is concerned that we have an adequate supply of younger electrical engineers ready to fill the jobs of people who are retiring,” he said.
Made in USA Steel To Be Used On New Tappan Zee Bridge
in Uncategorized/by MAM TeamThe state Thruway Authority included a Buy America provision in its contract with Tappan Zee Constructors, the consortium designing and building the bridge, that requires it to use steel and iron manufactured in the United States.
Buy America provisions restrict the use of foreign steel, iron and items containing steel and/or iron on a contract to one-tenth of 1 percent of the total contract cost or $2,500, whichever is greater, according to the DOT.
The Thruway Authority is replacing the Tappan Zee Bridge with a 3.1-mile twin-span cable-stayed bridge with angled main span towers, making it the largest bridge construction project in the history of New York. It will also be the world’s widest bridge.
It’s also the biggest transportation design-build project in U.S. history, according to Infra Insight, a blog that tracks infrastructure projects.
The inclusion of American-made steel plate in the new bridge bucks a trend of steel made in China being used in major infrastructure projects. China-made steel was recently used in the Verrazano-Narrows Bridge and San Francisco-Oakland Bay Bridge.
ArcelorMittal’s Burns Harbor facility supplied high-performance steel for the bridge pilings last year and will continue to provide steel to the steel fabricators High Industries and Hirschfeld Industries Bridge, who are two of the major contractors on the five-year project.
“We are very pleased to have been selected to provide our high-performance plate material for this major, historic infrastructure project,” said ArcelorMittal USA Plate CEO John Battisti. “Our USA plate team has been keenly involved in weekly meetings with our customers on the planning, development and delivery of these plate products, to ensure they are pleased with our performance during all phases of the project.”
American Institute of Steel Construction President Roger Ferch said the contract shows the U.S. steel industry remains competitive.
He said the award of the Tappan Zee structural steel contract to American companies “validates the fact that the United States steel construction industry has the capacity, capability and collaborative spirit to meet our nation’s needs.”
To date, 53 of the 121 subcontractors and suppliers working on the project — approximately 44 percent — are disadvantaged business enterprises, according to a press release from the state.
Disadvantaged business enterprises are small businesses which are at least 51 percent owned by socially and economically disadvantaged individuals. The federal certification includes “minority-owned business enterprises” and “women-owned business enterprises” that meet certain federal requirements.
Gov. Andrew Cuomo and the Federal Highway Administration made a commitment to ensure that at least 10 percent, or $314 million, in subcontracts associated with the New NY Bridge project will go to businesses that qualify as disadvantaged business enterprises, according to the state.
Among the subcontractors, 23 percent of the disadvantaged business enterprises are based in the Hudson Valley.
“Our team is committed to providing meaningful opportunities for disadvantaged businesses and the team members of Tappan Zee Constructors have a solid track record of meeting and exceeding participation goals,” Carla Julian, TZC community outreach/diversity manager, said in a press release.
Tappan Zee Constructors is expected to finish the bridge, which is designed to last 100 years without any significant structural maintenance, in early 2018.
Zippo Lights Up Homegrown Manufacturing
in Consumer Products/by MAM TeamVeterans Benefits Bill Blocked
in Uncategorized/by MAM TeamRepublicans and Democrats normally agree on the need to enhance benefits for the nation’s 22 million veterans and their families, but Republican senators wanted to lower the amount of spending in the bill. The GOP senators also wanted to include a measure that would have imposed new sanctions against Iran, which President Obama has warned against doing at this time. Senate Majority Leader Harry Reid blocked the amendments from being considered.
“Shame on the Republicans for bringing base politics into a bill to help the veterans,” Reid said on the Senate floor Thursday morning.
The bill would have improved benefits for veterans, including better health care and dental services provided by the VA. It also would have guaranteed post-9/11 veterans access to in-state tuition rates at public colleges and universities in any state.
American Company Goes To The Mat For ‘Made In America’
in American Made, Automotive, Domestic Sourcing, Jobs, Made in USA, Manufacturing, Production, Small Business/by The Made in America Movement TeamAt a time when flag-waving couldn’t be more in fashion, David MacNeil knows a thing or two about standing up for American products. Or at least resting your muddy boots on them. While creating jobs in the process.
U.S. Olive Oil Producers Want Stricter Guidelines For Imports
in Uncategorized/by MAM TeamBut it doesn’t seem to be working. The recently passed farm bill excluded a clause that would have allowed for government testing of domestic and imported olive oil to make sure it was labeled correctly. The main concern is foreign producers cutting their extra virgin olive oil with other oils yet still labeling it as extra virgin.
The U.S. Department of Agriculture classifies olive oil as “virgin olive oil, or blends of virgin olive oil and refined olive oil.”
A recent U.S. International Trade Commission report on olive oil outlines how international standards are often unenforced, which can allow for mislabeling. The report highlights the differences in each country’s standards, production, consumption and distribution.
A “national standard of identity” enforced by the government would permit “more aggressive U.S. action,” Eryn Balch, North American Olive Oil Assn. executive vice president, said in a statement. That action would include injunctions and seizures against unscrupulous participants in the olive oil market.
The American Olive Oil Producers Assn. plans to keep putting pressure on the USDA to perform mandatory quality testing for all olive oils.
Are you an import-only olive oil buyer? Let us know in the comments below.
Why China's Ugly Manufacturing Report Should Be Ignored
in Uncategorized/by MAM TeamMarkets around the world started selling after the report came out.
However, economists agree that we shouldn’t jump to any conclusions based on this one report.
“Surely this flash PMI has quite big market impact and markets have already been hit today,” said Bank of America Merrill Lynch’s Ting Lu. “However, our suggestion is still to downplay it due to the poor quality of this HSBC flash PMI in the year beginning. The survey period of the HSBC flash PMI was 12-18 Feb, but the first six days in February are national holidays and many SMEs, which could be the majority of the HSBC PMI sample, were not open until mid-Feb, so the quality of this flash PMI could be quite low.”
“Also note that PMI data are heavily seasonally adjusted, but the seasonal adjustment is quite inaccurate due to the different timing of Chinese New Year holidays and short record (since year 2005),” added Lu. “Actually the HSBC PMI did a poor job in predicting turning points of the Chinese economy in the past two years.”
The HSBC’s PMI is computed using monthly replies to questionnaires sent to purchasing executives.
“The sample period is very short, covering only seven days (12-18 February) according to the index’s compiler, Markit, with a response rate of approximately 85%-90% our of a total sample of about 420 manufacturers,” said Barclays’ Jian Chang and Jerry Peng, who also acknowledged many of Lu’s criticisms.
Unfortunately, market participants already appear to be trading on the news.