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Economy in Brief

U.S. Factory Sector Orders Decline As Petroleum Prices Fall
by Tom Moeller  December 5, 2014

New orders to all manufacturers fell 0.7% (+2.1% y/y) during October following a 0.5% decline. No change in orders was expected in the Action Economics Forecast Survey. Orders for nondurable goods (which equal shipments) declined 1.5% (-1.1% y/y) as the value of  petroleum shipments fell 6.3% (-9.3% y/y) due to lower prices. Chemical shipments also fell 1.1% (-2.2% y/y). To the upside, apparel shipments rose 3.0% (11.3% y/y) and food product shipments gained 1.2% (7.5% y/y). Shipments of durables ticked 0.1% higher (5.7% y/y). Transportation equipment shipments gained 0.8% (3.8% y/y), led by a 2.6% rise in heavy duty trucks. New orders for durable goods rose 0.3% (5.5% y/y), initially reported as 0.4%. Transportation equipment orders rose 3.4% (3.9% y/y) but machinery orders fell 1.4% (+6.0 y/y).

Unfilled orders increased 0.4% (12.3% y/y) for the second month while order backlogs excluding the transportation sector rose 0.4% (6.9% y/y). Electrical equipment backlogs rose 1.4% (14.3% y/y) and unfilled orders of computers & electronic products gained 0.7% (6.9% y/y). Unfilled orders of furniture improved 0.9% (12.2% y/y) but machinery backlogs slipped 0.4% (+10.9% y/y).

Inventories in the factory sector ticked 0.1% higher (3.5% y/y). In the durable goods sector, inventories rose 0.5% (6.0% y/y). Primary metals inventories gained 0.9% (8.1% y/y) but electrical equipment inventories retreated 1.2% (-3.8% y/y). Amongst nondurable goods industries, inventories declined 0.5% (-0.2% y/y). Petroleum inventories dropped 3.6% (-9.0% y/y), basic chemicals slipped 0.1% (+0.7% y/y) but apparel inventories rose 3.1% (25.3% y/y).

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

Factory Sector- NAICS Classification (%) Oct Sep Aug Y/Y 2013 2012 2011
New Orders -0.7 -0.5 -10.0 2.1 2.7 2.9 12.9
Shipments -0.8 0.1 -1.1 2.2 2.0 4.0 12.1
Inventories 0.1 0.2 0.1 3.5 2.3 2.4 10.2
Unfilled Orders 0.4 0.4 0.6 12.3 7.0 3.7 10.0
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