http://www.valvemagazine.com/index.php/web-only/blog/rss description http://www.valvemagazine.com/index.php/web-only/blog/post/77 Canada’s Prime Minister, Stephen Harper, made it very clear after the Keystone XL pipeline was rejected by the U.S. that Canada would be seeking other markets for its natural resources. Indeed, he has wasted no time pursuing that goal, and is currently in China, hammering out deals for the country’s natural resources. The prime minister insists that it is in Canada’s national interest to send oil and gas to Asia and he is therefore looking to sew stronger economic ties with the world’s fastest-growing economy. Harper has repeatedly said that building pipelines such as the proposed Northern Gateway oilsands pipeline to the West Coast is a national priority as Canada looks to ship its energy resources to Asia. Harper’s trip comes just a few days after the announcement that PetroChina has agreed to take a 20% stake in a Canadian shale gas project in British Columbia owned by Royal Dutch Shell. This is just the latest investment that China has been making in U.S. and Canadian unconventional gas reserves as it seeks to reduce its reliance on dirty coal and oil imports. What does this mean for America’s energy requirements and for valve and other manufacturers in the Americas? Will there be any mention of China’s notorious rejection of intellectual property and copyrights in Mr. Harper’s negotiations? Speculation is rampant about the direction the talks will take, as Harper is in China to sell more than oil. He has indicated in the past that he is anxious to work out a much wider trade scenario that follows a global pattern by government and business to lower barriers to trade world-wide, insisting that expanding Canada’s trade horizons means more markets for Canadian goods and services. But just as the dream of opening up markets for goods made in America resulted in jobs lost south of the 49th parallel, the lowering of trade barriers has enabled the export of many Canadian jobs to low-wage jurisdictions. North American based valve manufacturers have certainly seen their own fortunes affected by the low cost goods coming from offshore. Harper seems almost obsessed to direct a good deal of Canada’s energy infrastructure away from the United States, something that has inspired him to call those Canadians who want environmental protection equal to economic opportunity enemies of the state. He is intent on taking advantage of China’s obsession with energy security by adding an oil pipeline to the natural gas line slated for exports to Asia by 2015. While it is true that domestic environmental and social roadblocks have slowed down his aspirations and the Chinese have been impatient about the delays in many pipelines, Harper remains undeterred. While short term economic gains are possible for North American manufacturers and laborers who would supply and build pipelines to export the oil and gas offshore, long term consequences of increased Canadian energy trade with China are largely unknown. Certainly it will be an economic boon to Canadian producers, but what effect will it have on future energy security for the U.S.? In the deal with Royal Dutch Shell, Chinese companies will undoubtedly gather much-needed knowledge and experience which can be used to develop the shale gas market in China, where there are huge reserves. What does this exchange of technology mean for valve manufacturers here in North America? What effect will that have on long term employment growth and quality? While the exploits of Canadian politicians are rarely of interest in the U.S., Stephen Harper’s trip to China is one which should be followed closely. http://www.valvemagazine.com/index.php/web-only/blog/post/76 On Jan. 18, 2012, President Obama notified Canada’s Prime Minister Stephen Harper that he was rejecting the Keystone Pipeline. While he did say that he was not closing the door on the project, political hay has nevertheless been made by his opposition because the rejection of the pipeline means thousands of lost jobs for Americans. Trans Canada contends that Keystone XL could yield 20,000 new jobs, 7,000 of those in manufacturing. No doubt many of those would be in the manufacture of valves and related materials, definitely a boon to the valve industry in the Americas. In the past, Trans Canada has also cited a 2010 study that found the project would have supported nearly 99,000 induced and indirect jobs, but in September 2011, one of the unions supporting the project predicted that, over four years, Keystone XL would create nearly three times the direct and indirect jobs that TransCanada claims. In an economy where good manufacturing jobs are hard to come by, the decision to squash the pipeline does seem to be counterproductive to the stated goal of jobs creation. However, a week later, in his State of the Union address, the President laid out what he is calling a “Blueprint for an America Built to Last,” encouraging companies to create manufacturing jobs in the United States while removing deductions for shipping jobs overseas and encouraging insourcing. He is offering a domestic production incentive for manufacturers who create jobs in the U.S. and doubling the deduction for advanced manufacturing. He is proposing to reform the current deduction for domestic production by more narrowly focusing it on manufacturing activities—for example, it would no longer cover oil production. In that address, Obama indicated there would no longer be incentives to oil companies, but he did say the administration would take every possible action to safely develop the energy from natural gas, production of which could support more than 600,000 jobs by the end of the decade. In this instance, of course, many of those jobs would be in the manufacture and distribution of valves and related materials. So the government giveth and the government taketh away. Hydraulic fracturing and production of unconventional natural gas requires the use of up to 2,000 valves for each wellhead, so the President’s statement that he would encourage responsible natural gas production is good news for manufacturers, but pipelines also utilize hundreds of valves, and at least for now, the Keystone Pipeline will not be using any. Tax breaks were announced that give U.S. valve manufacturers even more incentive to bring their production back onshore, but if oil companies would no longer receive subsidies and incentives, will there be repercussions to the industry? With mixed messages coming from the White House, it is more important than ever to be vigilant. A lengthier report on how the 2012 State of the Union address impacts the valve industry will be the Web Feature on the ValveMagazine.com website later this week. Share your news and opinions on this and any other stories you feel should be covered by responding to this blog or sending an e-mail to kkunkel@vma.org. http://www.valvemagazine.com/index.php/web-only/blog/post/74 The new year seems to be off to a fairy solid, if not exciting, start, and now is the time that predictions of what lies ahead begin to appear. Here are a few, plus a warning of some scary stuff. Forecasts Manufacturers Alliance for Productivity and Innovation (MAPI) chief economist and director of research Dan Meckstroth, Ph.D., predicts GDP growth of 2.1% in 2012 and 2.4% in 2013, but sees a 40% chance of a recession, caused by the problems in the Eurozone and U.S. and European political gridlock leading to increased austerity measures, and vulnerability to the next major shock. He sees general uptrends in manufacturing, particularly in aerospace. Aluminum, paper and HVAC equipment are weaker, and will probably remain flat, he predicts, while household appliances, pharmaceuticals and public works construction will decline. Overall, he predicts, manufacturing production will increase 3% this year and 4% in 2013. He adds, however, that “the manufacturing sector is only half recovered from the 2008-2009 recession,” and manufacturing production will not reach its previous cyclical peak until 2Q 20144. The National Association of Manufacturers has weighed in, saying that current regulations — the EPA’s revised Boiler MACT rules in particular — “will do significant harm to job growth and investment at a critical time in our recovery,” according to a statement by NAM president and CEO Jay Timmons. “This is yet another example of the EPA pursuing an aggressive agenda that is putting jobs at risk and creating uncertainty throughout the economy. Factoring in regulatory costs currently in place, it is already 20 percent more expensive to manufacture in the United States compared to our major trade partners.” The market research firm Stratfor has released its Annual Forecast for 2012. Here are a few highlights: Europe, according to the Forecast, will stabilize for a while but will continue to slide slowly and painfully into a deepening recession. At the same time Germany, assisted by France, will work to try to develop more political integration in the eurozone, an effort that will stretch into 2013 and beyond. Challenges facing China will continue, the forecast goes on, but will not stop the country from working hard to increase its regional influence and access to resources. An internal economic slowdown will requires some difficult steps that may contribute to stability in the short term but cause increased problems down the road. The report goes on to cover the rest of the world, but not the U.S. It includes many fascinating insights, and I recommend reading it. A dire warning Stratfor recently suffered a terrible blow: their Web site was hacked repeatedly, four of their servers destroyed, and both internal emails and credit card information from clients and subscribers stolen, apparently by the hactivist group Anonymous. They’re rebuilding, but have taken a lot of damage. Which brings up (again) the subject of cybersecurity. If you haven’t seen the January issue of Popular Mechanics I recommend you take a look at it. The cover story, “The Secret War,” provides some alarming information on how extensive foreign (mostly Chinese) cyber espionage against both government and industry has become, and how little is being done — or apparently can be done — to stop it. One especially frightening quote comes from John Brenner, former head of U.S. counterintelligence: “’Perimeter defense if finished,’ Brenner says. ‘If you want to talk about really confidential stuff in email you’ve got to understand that if you’ve got a real sophisticated adversary, they’re reading it.’” Sort of gives you pause as to what you put in emails, doesn’t it? http://www.valvemagazine.com/index.php/web-only/blog/post/75 In this, my first entry for the Valve Magazine.com blog, I’d like to take a quick moment to say “hello.” With my background as an editor of magazines covering the energy and heavy industrial sector, I’m delighted to be able to stay in this challenging and ever-changing world of valves by working with the Valve Manufacturers Association and the Valve Magazine family. This is an exciting time in the oil and gas industry, and news is breaking daily on potential new oil and natural gas pipelines throughout North America. Today, Jan. 18, Canada’s Prime Minister, Stephen Harper, received a phone call from Barack Obama, President of the United States, informing him that his administration had decided to turn down TransCanada’s application to build and operate the Keystone XL pipeline. According to Obama, the decision was not a decision on the merits of the project and that it was without prejudice, meaning that TransCanada is free to re-apply. TransCanada’s CEO, Russ Girling, said that his company will re-apply for a presidential permit to build the Keystone XL pipeline, and will continue its work with officials in Nebraska on an alternative route that avoids the ecologically sensitive Sand Hills region. In this same week, hearings have commenced in Canada on the proposed dual pipeline Northern Gateway project by Enbridge. Here’s hoping that this 728 mile (1172 kilometer) project will not be plagued by as much political play as Keystone XL. While environmentalists are quick to point out the potential dangers of pipelines, they are largely unable to show how they propose to meet the energy needs of North Americans if oil and gas were not readily available. While there are indeed many alternative forms of energy, the bottom line is, oil and natural gas are the most economical and most readily available. As manufacturers, distributors and consumers of valves and actuators, I believe it serves the U.S. and Canadian valve industry—both manufacturers and end-users—well to keep a close eye on the progress of the various pipelines and approvals, so I invite you to stay tuned to Valve Magazine.com this week for a report on the current state of affairs. I would also invite our readers and members to share their news and opinions on this and any other stories you feel should be covered by responding to this blog or sending an e-mail to kkunkel@vma.org. http://www.valvemagazine.com/index.php/web-only/blog/post/73 Welcome to 2012. How do things look for the new year? Pretty much like last year, with improvements in some areas, like manufacturing, and continued stagnation in others. The real estate market has shown a slight improvement, with total construction spending for November 2011 totaling $807.1 billion, up 1.2% from October’s $797.4 billion, according to the Census Bureau, although, as the graph shows, it still has a long way to go. On the other hand, the S&P/Case-Shiller Home Price Indexes of U.S. home prices continued to decline in October for the sixth month in a row despite, says CNN Money, recent reports of increases in new and existing home sales and in home building. Much of the decline has been driven by foreclosures, says Forbes, noting that not much else will recover until home prices recover. The biggest drag on the home-building market is the backlog of homes that are in default but not yet foreclosed; banks are reluctant to foreclose all such houses because it would drive the market down even more. Recent reports suggest that the situation may not begin to improve until late 2012 or even 2013, while others suggest that, with all those underwater mortgages, recovery may take a decade or more. The Baker Hughes U.S. rig count was little changed in the past week at 2700 (313 above last year’s number), although the count in Canada seems to be declining, down 185 in the past week to 221 and down 25 from last year at this time. And the increase in supply of natural gas is depressing coal production, as power utilities, faced with stricter limits on mercury and other emissions, look to either shut down older coal-fired power plants or convert them to run on natural gas. Bad news for the coal folks, but good news for the gas folks. We probably shouldn’t expect much help from the government; the American Water Works Association reports that “Congress has cut the U.S. Environmental Protection Agency's FY2012 budget by $233 million compared to this year and by $524 million compared to the amount requested by the White House. Under a single spending bill covering all federal agencies, lawmakers also reduced funding for State Revolving Funds, providing $919 million for the Drinking Water SRF and $1.4 billion for the Clean Water SRF.” So much for infrastructure. On January 3 the Federal Reserve’s Open Market Committee reported the results of its December 13 meeting showing little change from the previous month, and no discernable change in policy. What about Europe? It is bracing, The Times reports, for further economic contraction as austerity measures are put in place. One result of these austerity programs, according to a column by Nelson Schwartz in The New York Times, has been a decline in the value of the Euro relative to the yen and the dollar. This makes European exports more competitive, which is not so good for U.S.-based manufacturers selling into that market. But there are hopeful signs. The 2011 Manufacturing ISM Report On Business improved in December, with the PMI increasing by 1.2 percentage points to 53.9%. The Conference Board Consumer Confidence Index has continued to increase, reaching 64.5 in December after increasing in November, and is at the level of April 2011. On December 12 the Association for Manufacturing Technology and the American Machine Tool Distributors’ Association reported that October U.S. machine tool orders were $463.32 million. This was down 22.4% from September but up 20.3% when compared with the total of $385.21 million reported for October 2010. With a year-to-date total of $4,529.11 million, 2011 is up 80.5% compared with 2010. While the U.S. economy is accelerating a little (the Federal Reserve prefers to call it “a moderate pace of economic growth,”) China is also showing moderate growth, with the Chinese purchasing managers’ index rising to 50.3 in December from 49 the previous month, according to Reuters and The New York Times. “Onshoring” seems to be continuing, with U.S. manufacturing employment increasing as reduced wages for new hires (and increasing transportation costs) make American workers more competitive against those overseas. While no one likes to see wages decline, lower wages are better than no wages. In sum, there seems to be no overwhelming force driving the economy up or down. But if we stick with our knitting and seize opportunities as they present themselves, we should do okay in the long run. http://www.valvemagazine.com/index.php/web-only/blog/post/71 Our friends in the Peoples Republic of China have been throwing their weight around a little more than usual. The latest was a decision to impose increased tariffs on U.S.-made cars imported into China. The reasons given by the PRC government were immaterial — the action was in response to a report to Congress by the U.S. trade representative citing China’s unfair trade practices and was merely the latest in a series of tit-for-tat actions between the U.S. and China. This comes on top of news that a great many, if not most, of the cases of cyber espionage and theft of intellectual property and trade secrets have been traced to about 12 groups in China, working with the encouragement and support of the government. But there are more pressing matters to think about: Other news stories report that China has moved away from its anti-inflation policies and is concentrating on restoring its torrid pace of economic growth. Yet this might not help. A recent piece in The Telegraph suggests that China is experiencing the bursting of a credit bubble, with a 35% drop in new home prices in Beijing from the previous month, a 70% drop in property sales in some inland cities, a drop in steel production, a steady decline in stock prices (the Shanghai Composite stock index is down 29% from mid-April), the flight of foreign capital leading to a steady drop in foreign currency reserves, and heavy pressure on the banking system, all leading to “an epic deleveraging hangover.” China depends on economic growth and the promise of better times ahead to maintain that most Chinese of goals, domestic tranquility and order (which is a value going back many centuries). And that tranquility has seen its latest challenge in the open revolt of a village in Guangdong after the suspicious death of a representative who had tried negotiating with the local government over illegal land grabs. The government will take whatever measures it feels it must to avoid economic turmoil. If the measures taken to spur economic growth and domestic demand lead to the Chinese increasing their imports from the U.S. that would be all to the good. But if they fail it could lead to severe internal inflation, an economic slowdown and a devaluation of the yuan (possibly causing a trade war) and a global economic slowdown. Not good. One further Chinese note: There have been reports of large discoveries of shale gas in China that may significantly reduce its demand for imported gas — just when it was looking as if we might be able to make a few bucks exporting our own shale gas. http://www.valvemagazine.com/index.php/web-only/blog/post/70 The U.S. Congress has once again shown that it is unable to do its job, as shown by its current 9% approval rate. If you or I had a 9% approval rating we’d — no, we’d never get to 9%; long before we reached that number we’d have been fired, and for good reason. But how much does the government’s ineptitude matter? It sure has an effect on the stock markets, but what aside from that? Let’s compare what’s been happening on Wall Street in recent weeks to what’s been happening in the real world of making and selling actual products and services. The National Association of Manufacturers said that the supercommittee failure represents a missed opportunity for economic recovery, and warned that the automatic spending cuts promised if the group could not reach consensus — which were to cut domestic and defense spending — “will have a massive ripple effect throughout the entire manufacturing economy, affecting large defense contractors, tens of thousands of small and medium-sized manufacturers in the defense supply chains and over 1 million workers.” But those cuts, if they get enacted at all, are more than a year away, and much can happen between now and then. At the same the economic trend indicators continue to point up, however modestly, and in some cases are showing increasing optimism. The Conference Board’s Index of Leading U.S. Economic Indicators was up 0.9% in October, following a 0.1% increase in September, and a 0.3% increase in August. Conference Board economist Ataman Ozyildirim attributed much of the increase in October to a “sharp pick-up in housing permits” — an uptick that, he said, “suggests that the risk of an economic downturn has receded.” On Nov. 15 the U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for September, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,209.7 billion, up 0.6% (±0.3%) from August 2011 and up 11.6% (±0.4%) from September 2010. At the same time the total business inventories/sales ratio based on seasonally adjusted data at the end of September was 1.27, down a bit from the year-earlier figure of 1.30. The job situation hasn’t improved much, but it hasn’t gotten worse, according to the U.S. Bureau of Labor Statistics, which reported on Nov. 22 that “[r]egional and state unemployment rates were generally little changed or slightly lower in October. Thirty-six states and the District of Columbia recorded unemployment rate decreases, five states posted rate increases, and nine states had no rate change.” Lastly, VMA’s “State of the Economy Survey – November 2011” reports that “Last month’s shipments were up for 66% of the participants. Eighty-eight percent expect November’s shipments to be greater or equal to the same month last year. An equal percent expect next quarter to be greater or equal to the same quarter last year. Last month’s orders were up for 68% of the participating manufacturers and only 4% of the participants expect a decline in November orders. More manufacturers are optimistic vs. pessimistic about the economy.” So who are you going to believe: those jokers in Washington, or the people who do the actual work, and make the things that make our country and the world go? http://www.valvemagazine.com/index.php/web-only/blog/post/69 Time for a statistical roundup. Black Friday sales were better than expected, and sales on Cyber Monday were up 22% over last year to $1.25 billion, according to Comscore. If the economy is so sluggish (more on this in a moment), why did this happen? According to the Federal Reserve, the household debt service ratio (DSR), defined as the percentage of personal income devoted to mortgage and consumer debt payments, had fallen by the second quarter of 2011 to 11.09, having declined fairly steadily from 13.96 in the third quarter of 2007, to its lowest since the fourth quarter of 1994. It has been suggested this may help explain the good sales numbers. Others, however, suggest the DSR is an incomplete number, and, all things considered, U.S. consumer demand cannot be expected to recover enough to get the economy moving again, and we should be prepared for “anemic to modest GDP growth, for many years to come.” And slow growth seems to be the consensus. The Philadelphia Fed reported that its latest survey of manufacturers showed an increase in plant utilization to nearly 75% from 73% in November of 2010, while employment prospects picked up a little. Forward-looking sentiment was a bit better: “The broadest indicator of future,” said the report, “activity increased nearly 15 points and is now at its highest reading in eight months.” The Conference Board’s Consumer Confidence Index improved in November to 56.0 after declining to 40.9 in October, while its Index of Leading Economic Indicators rose 0.9% in October to 117.4, after having risen just 0.1 in September and 0.3% in August. Employment remained fairly static, with the Bureau of Labor Statistics reporting that regional and state unemployment rates were generally little changed or slightly lower in October, with nonfarm payroll employment up in 39 states and the District of Columbia, and down in 11 states. The greatest increases were in Illinois (+30,000) and California (+25,700). It may be worth noting that in California’s Silicon Valley rents have been increasing rapidly as the high-tech economy improves and more and more people move into the area. Also on the employment front, the ADP National Employment Report showed an increase of 206,000 private-sector jobs in November, although just 7,000 were in the manufacturing industry, while 28,000 were in the goods-producing sector and 178,000 were in the service-providing sector. Regardless of sector, increased employment translates to increased demand. Nonfarm business sector labor productivity also increased, according to the BLS, rising at a 2.3% annual rate during the third quarter, while output increased 3.2% and hours worked went up 0.8%. At the same time unit labor costs in fell 2.5% in the quarter due to a 2.3% increase in output per hour and a 0.2% decrease in hourly compensation. The Federal Reserve’s Beige Book, released Nov. 30, reported similar figures, with overall economic activity increasing “at a slow to moderate pace” except in St. Louis, where it declined slightly. The Manufacturing ISM Report On Business purchasing managers index for November reached 52.7%, marking 28 straight months of increasing economic activity in the manufacturing sector. So why were holiday sales so good? Pent-up demand? Hope for the future? Who knows, but let’s enjoy the good feelings while we can. http://www.valvemagazine.com/index.php/web-only/blog/post/68 New York Times columnist Thomas Friedman has been writing and talking on TV about the skills gap in the United States. American workers, he has said, are under trained and overpaid; unless they increase their skill levels to exceed those of competitors in other countries international business pressures will reduce their wages to those of other countries. No American worker wants to see wages decline. And yet at the same time thousands of jobs in American manufacturing companies go begging because no workers with the skills to fill them can be found. ValveMagazine.com’s news section recently included a link to an article entitled Decline in manual skills raises concerns for future work force. Originally in the Dayton Daily News, it reported that skills as simple as using the hands to do things, from making things to drawing, are declining as kids spend more and more time with computers. Can the schools fix the problem? Some public schools, strapped for funds, have been are eliminating industrial arts programs, although others are upgrading them. What about the schools that advertise on TV? Some deliver good training as promised, but there is an unfortunate history of others paying more attention to extracting tuition from students than in actually teaching them. Last year an article in The New York Times discussed how some of these are recruiting students with exaggerated promises of future earnings while saddling them with debt for education loans, and another article in the Times advocated state action to correct some of the abuses. Other states are considering crackdowns as well. What can be done? Professional associations are doing what they can. The VMA’s Valve Ed program offers good training both in regional events and in the form of prepackaged course to be delivered on-site. The International Society of Automation (ISA) runs an extensive training program and the American Supply Association (ASA) has recently opened ASA University. In August of this year the President’s Council on Jobs and Competitiveness, in partnership with the National Association of Manufacturers (NAM) and other business groups, announced in August “that nearly 50 businesses have pledged to double or increase the number of science, technology, engineering and math (STEM) internships they offer to students.” NAM is also involved with the Manufacturing Institute. How you can help But all this is insufficient. Research programs, grants to schools and courses from VMA, ISA and ASA are all well and good, but more manufacturers must step up and provide training themselves. How about setting up employee training programs within your own company? Take advantage of the Valve Ed program, or set up your own, using your own people. Classes could be scheduled after work. The teachers could be skilled people already working for the company, or they could be hired from outside. It would cost some money to do it, but if you can’t find qualified CNC programmers, for example, you could train your own with exactly the skills your company needs. Just remember to reward graduates, or you may find that with training they are worth more than you are paying them, and leave for greener pastures. http://www.valvemagazine.com/index.php/web-only/blog/post/67 There’s an expression — supposedly an old Chinese curse — that goes, “may you live in interesting times.” I wonder if these qualify. While industrial production and business profits continue to recover nicely, the threat of a European financial (and perhaps political) collapse hangs heavily overhead, while in the U.S. the Occupy movement seems to be spreading. Oakland, CA, across the Bay from San Francisco, has recently taken center stage in the latter. It started with a series of missteps by city government; first they drove the protesters out with tear gas, and then allowed them back, and now they can’t seem to decide what to do – or what to think – of the whole affair. The movement is calling for a general strike that they hope will shut down not just the schools and retail establishments but also the Port of Oakland. It’s not the anti-Vietnam war protests and the Burn Baby Burn riots of the 60s, but it makes for interesting reading in the newspapers. And, who knows, maybe something will come of it. We’re also reminded of the ongoing threat posed by cyber warfare. A recent report from cyber security firm Symantec talks about attacks on 29 chemical companies and “another 19 in various other sectors, primarily the defense sector” that apparently originated in China. And the National Cybersecurity and Communications Integration Center recently published a bulletin that says that the hactivist group Anonymous has recently begun targeting industrial control systems; perhaps they were inspired by the Stuxnet attack on Iranian nuclear facilities, but it’s not a hopeful sign. An October 25 story by AP technical writer Jordan Robertson has appeared in the news describing increases in the frequency of attacks on the programmable logic controllers (PLCs) that control so much of our factories and critical infrastructure. Yet business seems to be picking up. The latest survey result from VMA, “State of the Economy Survey – October 2011,” shows general, if slow, improvement. The Federal Reserve Open market Committee release for November 2 showed a small improvement in outlook over the previous month. This followed an October 26 report from the Department of Commerce that orders for core capital goods rose 2.4% in September (excluding aircraft, which made the overall figure for manufactured durable goods a decrease of 0.8% in the same month), and real GDP rose at a 2.5% annual rate. So progress is being made, despite it all. And we’ve certainly been through far worse times and recovered.