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Economy in Brief

U.S. Factory Sector Orders and Inventories Strengthen
by Tom Moeller  June 3, 2014

New orders to all manufacturers increased 0.7% (4.9% y/y) during April following a 1.5% March advance, revised from 1.1%. A 0.6% rise was expected in the Action Economics Forecast Survey. The gain reflected a 0.6% rise (7.1% y/y) in durable goods orders, led higher by a 13.2% surge (5.8% y/y) in defense aircraft & parts bookings. Factory sector orders excluding transportation rose 0.5% (3.8% y/y), the weakest gain of the last three months. Orders for nondurable goods (which equal shipments) improved 0.7% (3.0% y/y), making up a 0.5% March decline. The rise reflected a 1.5% rebound (4.1% y/y) in shipments from oil refineries and a 0.7% recovery (-0.2% y/y) in basic chemicals shipments. Shipments from textile mills gained 0.2% (3.2% y/y) and food product shipments rose 0.2% (6.4% y/y).

Inventories in the factory sector matched expectations and increased 0.4% (2.8% y/y) after a 0.2% March rise. In the durable goods sector, inventories rose 0.2% (4.4% y/y), the same as in March. Transportation equipment inventories gained 0.3% (8.9% y/y) and furniture inventories increased 0.8% (2.6% y/y). Working lower were electrical equipment, appliance & computer inventories by 0.2% (-0.9% y/y), off 2.8% during the last six months. Inventories of computers & electronic products fell 0.6% (+3.4% y/y). Amongst nondurable goods industries, inventories increased 0.7% (0.5% y/y). The gain was led by a 3.8% jump (2.6% y/y) in petroleum and a 2.7% rise (22.3% y/y) in apparel inventories. Offsetting these gains was a 0.2% fall (-1.3 y/y) in chemical inventories while paper product inventories declined 0.8% (-0.5% y/y).

Unfilled orders jumped 0.9% (8.1% y/y), strong for the second consecutive month. Excluding the transportation sector, backlogs rose 0.8% (6.0% y/y). Backlogs of electrical equipment surged 2.4% (10.4% y/y). Unfilled orders in the machinery sector rose 0.8% (10.0% y/y) and unfilled orders for transportation equipment improved 1.0% (9.5% y/y). Unfilled orders of furniture rose 0.4% (3.6% y/) and fabricated metals backlogs gained 0.5% (-2.1% y/y).

The factory sector figures are available in Haver's USECON database.

Factory Sector- NAICS Classification Apr Mar Feb Y/Y 2013 2012 2011
New Orders 0.7 1.5 1.7 4.9 2.7 2.9 12.9
Shipments 0.3 0.4 1.0 3.9 2.1 4.0 12.1
Inventories 0.4 0.2 0.7 2.8 2.3 2.4 10.2
Unfilled Orders 0.9 0.8 0.3 8.1 7.0 3.7 10.0
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