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Economy in Brief

U.S. Factory Sector Orders and Backlogs Increase
by Tom Moeller  August 5, 2014

New orders to all manufacturers jumped 1.1% (1.5% y/y) in June following a 0.6% decline during May, revised from -0.5%. A 0.6% increase was expected in the Action Economics Forecast Survey. A 1.7% rebound (-0.6% y/y) in durable goods orders led the total higher. Factory sector orders excluding transportation equipment improved 0.8% (4.9% y/y), the third increase in the last four months. Orders for nondurable goods (which equal shipments) recovered 0.6% (3.5% y/y) but have improved just 0.6% since December. Shipments of plastics & rubber rebounded another 1.0% (4.5% y/y). Shipments from chemical plants improved 0.5% but were off 1.2% y/y. Textile mill shipments gained  0.5% (2.9% y/y) while apparel shipments jumped 2.6% (13.3% y/y).

Unfilled orders jumped 1.0% (6.8% y/y), strong for the fourth consecutive month. Excluding the transportation sector, order backlogs rose 1.2% (6.2% y/y). Backlogs of electrical equipment jumped 2.4% (10.3% y/y) and unfilled orders of furniture gained 1.8% (6.1% y/y). Unfilled orders in the machinery sector jumped 1.9% (12.5% y/y) but backlogs of computers & electronics rose just 0.6% (5.2% y/y).

Inventories in the factory sector improved a lessened 0.3% (4.0% y/y) after a 0.8% May rise. In the durable goods sector, inventories rose 0.4% (5.8% y/y) led by a 0.8% increase (4.8% y/y) in primary metals. Transportation sector inventories also gained 0.8% (10.7% y/y). Amongst nondurable goods industries, inventories ticked 0.1% higher (1.4% y/y), held back by a 0.6% decline in basic chemicals (-0.8% y/y). Apparel inventories offset this decline with a 1.9% rise and they're up by one-quarter over the last twelve months.

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

Factory Sector- NAICS Classification Jun May Apr Y/Y 2013 2012 2011
New Orders 1.1 -0.6 0.8 1.5 2.7 2.9 12.9
Shipments 0.5 -0.1 0.4 3.8 2.1 4.0 12.1
Inventories 0.3 0.8 0.5 4.0 2.3 2.4 10.2
Unfilled Orders 1.0 0.7 0.9 6.8 7.0 3.7 10.0
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