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Economy in Brief

Factory Inventories Up
by Tom Moeller September 2, 2004

Inventory accumulation in the factory sector is in high gear. Total inventories jumped 0.8% in July and the prior month's strong 0.7% gain was revised to 1.0%. Year to year growth of 3.9% is the strongest since early 2001.

Inventory accumulation has been widespread but notable amongst machinery (5.6% y/y) manufacturers as well as primary (5.9% y/y) & fabricated metals (7.6% y/y) producers.

Unfilled orders again were strong rising 1.2% but the ratio of unfilled orders to shipments ticked up only slightly and remained well below the highs of 2001.

Factory orders surged 1.3% following an upwardly revised 1.2% gain in June. Durable goods orders jumped 1.6% versus the advance report of a 1.7% rise.Non-durable goods orders (which equal shipments) rose 1.0% (11.8% y/y).

Factory shipments surged 0.6% following an upwardly revised 1.1% jump in June. Excluding the transportation sector shipments added 1.3% (12.2% y/y) to the 1.2% June spike.

Factory Survey (NAICS) July June Y/Y 2003 2002 2001
Inventories 0.8% 1.0% 3.9% -1.3% -1.8% -6.1%
New Orders 1.3% 1.2% 11.8% 3.7% -1.9% -6.7%
Shipments 0.6% 1.1% 10.0% 2.6% -2.0% -5.4%
Unfilled Orders 1.2% 0.6% 9.8% 4.2% -6.1% -5.9%
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