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BRIEFLY:
Manufacturing GDP up in 2006
Newly released figures from the U.S. Bureau of Economic Analysis show Illinois manufacturing increased its overall output in 2006 by more than $4.1 billion over 2005. Manufacturers were responsible for more than $77.6 billion of Illinois' economic activity last year.
The new figures place manufacturing a close second to Real Estate ($77.9 billion) as the leading economic sector of the state's economy. In fact, only hundredths of percentage points separate the two sectors. Real Estate accounts for 13.2 percent and manufacturing 13.1 percent.
Since 2002, when manufacturing hit a low of $64.9 billion at the end of the recession, steady improvement has been seen. In each of the past three years manufacturing has improved on average by about $3.5 billion each year.
Durable goods lead the way in the sub-sectors at $44.25 billion while non-durable goods account for the remaining $33.35 billion. Although official figures for individual manufacturing components are not yet available, it is expected that machinery manufacturing and chemical manufacturing will again lead their respective sub-sectors.
Rounding out the largest contributors to the Illinois economy were Government–$56 billion, Finance and Insurance–$55 billion, Professional and Technical Services–$49 billion, Wholesale Trade–$42 billion and Retail Trade at $33.8 billion.
The total Illinois GDP in 2006 stood at $589.6 billion, approximately $180 billion more than in 1997.
Source: Bureau of Economic Analysis
Price hedging — a critical component of a diversified natural gas purchasing plan
A recent poll conducted by the Procurement Strategy Council illustrates the unnerving effect increasingly volatile natural gas prices are having on budget and cost management. According to the research, procurement managers are constantly challenged to correctly anticipate and manage fluctuations in commodity price in order to prevent any revenue losses. "We are by no means trying to be an investment or profit center," says one energy manager, "All we would like to do is smooth out the commodity price curve and remove peaks or troughs that occur throughout the year."
So, how do you know what to do and when to act? Since it is nearly impossible to correctly 'time the market' on a continual basis, a diversified portfolio is the recommended strategy to help mitigate price spikes and flatten the price curve. One key component of a strategic plan that looks forward and takes action based on market conditions and your business requirements, instead of short-term "lowest price" consideration, is price hedging.
There are several methods to developing a fixed price for specific volumes of natural gas for specific future months. This fixed price can be established utilizing a traditional, single point-in-time transaction where customers 'time the market' themselves. This type of method can be spontaneous, or pre-planned, as when customers select a price target and then have their supplier watch for the market to hit that target. Of course, the results of these approaches can vary dramatically.
A more recommended strategy is to establish a fixed price over time using multiple transactions and a systematic, target-based approach. This type of method saves time, because purchases are made automatically, and eliminates guesswork by providing an objective, disciplined, 'take the emotions out of it' approach to locking in a portion of your annual load.
By combining this approach with monthly volume (dollar) cost averaging, IMA customers of Constellation NewEnergy Gas Division have mitigated volatility for more than 12 years. This hedging method, combined with other components of a diversified natural gas purchasing strategy offered only by Constellation, has significantly outperformed the market over the test of time.
To learn more about how you can develop a price hedging strategy designed for price risk management and that fits your comprehensive long-term natural gas purchasing plan, contact Jeff Abeln at 312-704-8527, or via email at
jeff.abeln@constellation.com.
Constellation NewEnergy, the IMA Energy Partner, is North America's #1 competitive wholesale & retail supplier.
Visit http://www.newenergy.com for additional information.
Chaos at the Capitol
Only days after the Governor and legislative leaders agreed to pass a stopgap one-month state budget and adjourn for a week-long Independence Day break, Governor Rod Blagojevich reversed course and used a constitutional maneuver to bring the General Assembly back to the Capitol to debate leasing the state lottery and issuing pension bonds. The call for special sessions allows legislators to again receive their daily stipend and travel reimbursement. The reimbursement and stipend were halted once the legislature entered overtime session on June 1.
Continuing on his pledge to call legislators back into session seven days a week, the Governor then called six special sessions aimed at keeping legislators in Springfield through the first weekend in July. The gubernatorial proclamations calling the special sessions require the legislature to consider solutions to fund the state's pension system, state employees' retirement system and teachers' retirement system.
House Speaker Michael Madigan (D-Chicago) scheduled another Committee of the Whole on July 5 to address the Governor's plan to lease the state lottery and fund the pension system. As part of a business panel, Greg Baise, IMA president & CEO, testified in the House that true reforms of the state's pension system are needed before additional dollars are invested. He noted that the state needs to operate like the business community by paying its bills and living within its means.
The Senate Revenue Committee also held a brief hearing to discuss the sale of the state lottery. Senators inquired as to how more than $600 million in education funding would be replaced if the state lottery was sold and its profits lost. Despite calling special sessions, the Governor has yet to introduce legislation designed to address any of the issues mentioned.
American Airlines seeks non-stop Chicago-Beijing route
IMA member company American Airlines (AA) has announced it will seek approval from the U.S. Department of Transportation to begin serving Beijing, China with direct flights from Chicago's O'Hare International Airport by March 25, 2009.
AA will seek the route as part of a new agreement between the U.S. and China to expand airline service between the two countries. The airline says its evaluation reveals a proposed route between Chicago and Beijing will provide increased customer choice and network competition with other carriers, and is based on the likelihood of economic success.
"We are very pleased to see American Airlines expand its already significant presence in Asia with this direct Chicago to Beijing service," said Gregory W. Baise, president & CEO of the Illinois Manufacturers' Association. "China's rapid growth and emergence as a leading world economy means a widening opportunity for Illinois manufacturers to sell their products to the world's most populated country. A direct Chicago to Beijing connection will significantly help sales staff establish a solid foothold in China."
Using its Chicago hub, American will be able to serve nearly 80 communities in 29 states with connecting flights direct to the Chinese capitol. American says it will use its 245-seat Boeing 777 aircraft with three classes of service. The flight to Beijing is expected to take 13 hours, 25 minutes, while the flight to Chicago would take 12 hours, 55 minutes.
"IMA member companies can help American Airlines expand service to China," Baise said. "Letters to Transportation Secretary Mary Peters will do much to demonstrate our support of a fellow IMA member company."
IMA members should visit the IMA's web site (http://www.ima-net.org/supportaa.cfm) where more information is available, including a sample letter of support.
Further details can also be found on the AA Website at http://www.flytoChinaonAA.com.
Family Medical Leave Act, workers' comp rules a pain, but small businesses say they're worth it
The Family Medical Leave Act and workers' compensation are two of the hardest workplace regulations for employers to comply with, but they're the two most helpful to workers, say small businesses in a recent survey.
Workers' comp provides medical care and compensation for injured workers without them having to sue their employers, and the businesses named it the single toughest employment law to follow.
The controversial medical leave act lets employees take up to 12 weeks of unpaid leave a year for family or medical emergencies. Business lobbyists want to curtail it; unions to expand it.
About half the companies favor restricting the law, while the other half want to leave it unchanged or even expand it.
The National Association of Professional Employer Organizations (NAPEO) surveyed 429 small businesses across the nation in May.
These businesses told the trade association that employment regulations are proliferating. Some managers are spending over a third more time on compliance than a decade ago.
A more complex portrait emerges from the survey, however, than the usual business complaints about government regulations. These small-business people recognize the importance of these rules but chafe under their increasing complexity.
"We have no argument with regulations that keep workers healthier and safer," said Milan P. Yager, executive vice president of NAPEO. "We just want legislators and regulators to ask themselves: Do these rules always have to be so complex?"
Small businesses, with fewer resources than large ones, find it tougher to comply with the blizzard of workplace regulations in the last few decades.
Among the survey's other findings: Only a few companies in the May survey said raising the federal minimum wage from $5.15 to $7.25 an hour will hurt their businesses. The report, "Following the Rules: Small Businesses Cope with a Complex New World of Workplace Regulations," is available at
http://www.napeo.org/newscenter/researchsurvey0607.cfm
NAPEO is the recognized "Voice of the PEO Industry®." To learn more about the PEO industry and how PEOs contribute to small businesses' success, visit NAPEO on the Web at
http://www.napeo.org.
Invest in your future with the IMA's Recycling Expansion and Modernization (REM) grant . . .
Recent reports (Wall Street Journal, 5/3/07, Al, Naik) indicate that there is growing scientific evidence linking high levels of carbon dioxide to the dramatic rise in allergies and asthma in the Western world. Other reports (Christian Science Monitor, 5/3/07, Spotts) warn that we won't be able to keep up with the expected rise in greenhouse-gas emissions over the next several decades."
"The case for sustainable business is compelling; social and environmental initiatives often lead to enhanced worker morale and retention, cost savings are significant, and in terms of longevity, well, we simply don't have the resources to continue on our current path." (www.thegreenguide.org, Tara Wesely)
The Illinois Department of Commerce and Economic Opportunities is doing its part to help Illinois companies deal with these issues through the Recycling Expansion and Modernization (REM) Grant Program. As a recipient of a REM multi-company grant, the Illinois Manufacturers' Association can offer your company a solid-waste assessment at 25 percent of the actual cost; the grant pays the remaining 75 percent.
Our environmental engineers possess a unique mix of experience and training that enables them to investigate and solve a variety of business problems. By working closely with participants, they will identify opportunities to improve efficiency by reducing raw materials utilization and wasteful practices.
Join the growing number of companies that are on the path to becoming green. Find out how easy it is to participate in the Illinois Manufacturers' Association REM multi-company grant by contacting Judy Parker at 800-875-4462, ext. 3036, or email:
jparker@ima-net.org today.
It's an investment in your future — one that will reap perpetual rewards for your business and your community.
For more information, contact Judy Parker, IMA Director of Training, 217-522-1240, ext. 3036, or email
jparker@ima-net.org.
ETIP grants reimburse companies for employee training
The Employer Training Investment Program (ETIP) supports Illinois companies' efforts to upgrade workers' skills in order to remain current in new technologies and business practices. The ETIP grant will reimburse Illinois companies for up to 50 percent of the cost of eligible employee training taken between July 1, 2006 and June 30, 2007.
Illinois companies that are retraining/upgrading the skills of their existing workforce may be eligible for ETIP grant money if they meet certain criteria.
Apply for training funds today! For details, contact Judy Parker, IMA Director of Training at 217-522-1240, ext. 3036, or email
jparker@ima-net.org.
NEW Website offers outstanding training opportunities:
http://www.ima-net.org/MIT/
Training is no longer a luxury, but a basic ingredient in the development of a business. In today's economy, with companies struggling to prevent lay-offs and closure, it is vital to maintain a competitive high performance workforce.
In response to this growing need, the IMA has launched a new service — the Manufacturers' Institute for Training (MIT). We have expert trainers in the fields of safety, quality, leadership/management, communications, lean manufacturing, project management, IT, and much more. Customized, on-site sessions can also be arranged to address your company's specific needs or issues. Visit
http://www.ima-net.org/MIT/ on the Web or contact Judy Parker, IMA Director of Training, at 217-522-1240, ext. 3036, or email
jparker@ima-net.org.
Order the IMA's 2007-2008 Benefits Report at https://www.ima-net.org/ben_report_order.cfm
Order the IMA's 2006 Annual Compensation Report at http://www.ima-net.org/reportorder/login.cfm
For more information, go to one of the links above, or contact Janie Stanley at 800-875-4462, ext. 3020, or email:
jstanley@ima-net.org
DATES OF NOTE:
More events may be found at http://www.ima-net.org/calendar.cfm
For information on any of the events listed here, please contact Judy Parker, 800-875-4462, ext. 3036, email: jparker@ima-net.org.
July 25, 2007
Lean Manufacturing: Quick Start
Oak Brook Executive Plaza Conference Center, 1225 W. 22nd St., Ste. 140
Designed to help participants quickly initiate team oriented on-going lean activities, this workshop includes instruction on lean terms and definitions, waste identification and analysis, team organization and choosing lean tools for waste free processes.
July 31 & August 1, 2007
Project Management Fundamentals
952 E. Eldorado, Suite 102, Decatur
This two-day real-world workshop is perfect for people who are looking to get a solid understanding of project management, and for those who wish to get their current projects back on track. REGISTRATION DEADLINE: JULY 16, 2007
August 2, 2007
Essential Leadership Skills for Newly Promoted and Frontline Supervisors
DePaul University's O'Hare Campus, 3166 River Road, Des Plaines
This fast-paced, invigorating one-day workshop will provide you with the skills to build better working relationships, develop the perspective of a leader, and establish realistic performance goals for employees. REGISTRATION DEADLINE: July 18, 2007.
August 7, 2007
5 S and Visual Controls
952 E. Eldorado, Suite 102, Decatur
This workshop will focus on effective methods of applying 5 S and Visual Controls techniques and tools in the manufacturing and office environments. Learn to maximize the benefits of red tag techniques, orderly work environment and visual workplace methodology. REGISTRATION DEADLINE: JULY 24, 2007.
August 8, 2007
5 S and Visual Controls
DePaul University, 150 W. Warrenville Road, Room 228, Naperville
(See description above) REGISTRATION DEADLINE: JULY 25, 2007.
August 15-16, 2007
Spanish OSHA 10-Hour Outreach Program (General Industry)
DePaul University, 150 W. Warrenville Road, Room 228, Naperville
REGISTRATION DEADLINE: AUGUST 1, 2007
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