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Economy in Brief

U.S. Factory Orders Continue to Disappoint
by Robert Brusca April 4, 2007

Each month the factory order report is a re-issue of durable goods from the week before with (usually) minor revisions plus a new look at nondurable goods shipments and inventories. This month the durable goods order gain was trimmed from a small rise of 2.5% to an even tinier rise of 1.7% for February following a plunge in January. The new data for February are for nondurable goods. Orders there rose by a meager 0.2% in the month. Over three months they are weak with shipments dropping by 1%. But the good news is that progress on inventory reduction is in train as inventories dropped by 4.4% in February.

The overall trends for the factory sector cut into three month blocks shows some revival in shipments compared to past trends. And there is a relatively sharp fall off in (still high) unfilled orders. Inventories are undergoing a gradual slowing in their build up. New orders continue to drop and at a slightly accelerated pace.

Sector detail for nondurables shows a lot of weakness. Beverages are weak as are the Textile Mill and Product sectors. For Textiles inventory reduction is being achieved at a very rapid pace. Apparel has just turned positive and Leather Goods shows considerable strength. Paper Products and Printing are weak with shipments declining. Petroleum & Coal and Plastics & Rubber also are seeing shipment declines. Basic Chemicals and Pharmaceuticals & Medicines have turned sharply positive.

These are the readings that are new in the day’s report. They are hardly encouraging.

Factory Orders
Factory Orders 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -3.5% -9.4% -5.6% -1.0% 6.6%
New Orders -9.0% -7.8% -4.9% -0.8% 7.1%
Unfilled Orders 14.5% 23.6% 20.3% 20.8% 17.0%
Inventories 1.0% 2.8% 5.0% 6.4% 2.5%
Nondurable goods 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -1.0% -11.8% -7.8% -1.3% 5.0%
Inventories -4.4% -3.3% 0.2% 2.2% 4.0%
Nondurable Goods: Orders and Inventories by Industry
Food Products 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments 1.7% 1.2% 2.0% 0.5% 0.9%
Inventories -0.9% 6.3% 6.3% 4.5% 4.3%
Beverages 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -20.7% -12.9% -7.4% 0.1% 7.4%
Inventories 3.0% 3.2% 1.3% -0.7% 4.2%
Textile Mills 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -3.6% -2.4% -3.0% -3.1% -12.6%
Inventories -25.3% -16.2% -8.1% -8.8% -7.9%
Textile Products 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -4.1% -8.6% -11.9% -8.5% 3.9%
Inventories -11.6% -9.2% -1.3% -2.6% -0.6%
Apparel 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments 0.8% 3.7% -8.6% -1.9% 8.0%
Inventories 7.4% -22.6% -12.4% -9.2% -1.1%
Leather & Allied Products 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments 105.8% 14.9% 16.7% 10.1% -2.9%
Inventories 23.4% 7.4% 15.1% 11.9% -9.0%
Paper Products 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -2.6% -5.5% -5.3% -1.5% 1.1%
Inventories 5.8% 2.9% 0.4% 1.9% -1.9%
Printing 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -7.0% 0.4% 1.1% 3.5% -3.1%
Inventories -15.8% -16.6% -2.0% 0.7% -2.1%
Petroleum&Coal 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -1.3% -32.7% -23.7% -5.3% 17.2%
Inventories -15.5% -30.4% -19.2% 4.5% 16.3%
Basic Chemicals 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments 4.7% -10.3% -5.9% 0.2% 4.0%
Inventories -0.4% -1.0% 1.7% 1.9% 2.9%
Pharmaceuticals & Medicine 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments 19.6% -6.5% -6.8% 6.3% -1.0%
Inventories -7.4% -1.1% 5.5% 11.0% -4.6%
Plastics & Rubber Products 3Mo 6Mo 9Mo 12Mo Year Ago
Shipments -6.6% -12.5% -7.0% -3.7% 7.0%
Inventories 6.5% 5.0% 1.0% 0.7% 4.6%
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