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Economy in Brief

U.S. Factory Sector Orders Remain Depressed; Order Backlogs Gain
by Tom Moeller  January 6, 2015

New orders to all manufacturers fell 0.7% (-1.0% y/y) during November following an unrevised 0.7% easing in October. The decline was the fourth consecutive drop and roughly matched expectations in the Action Economics Forecast Survey. The report included slight revisions to the advance durable goods report. Durable goods orders declined 0.9% and were unchanged y/y. Computers & electronic equipment orders fell 1.7% (-1.7% y/y) and transportation equipment bookings were off 1.3% (-6.6% y/y). Orders for nondurable goods (which equal shipments) declined 0.5% (-2.0% y/y) as the value of petroleum shipments fell 0.8% (-12.1% y/y) due to lower prices. Paper products shipments also declined 0.8% (+1.0% y/y) but chemical shipments improved 0.1% (-2.1% y/y). Also to the upside, apparel shipments rose 1.3% (14.1% y/y). Durable goods shipments fell 0.6% (+2.5% y/y) led by a 1.3% decline (-0.7% y/y) in transportation equipment shipments. To the upside were electrical equipment & appliance shipments by 1.4% (3.0% y/y).

Unfilled orders increased 0.4% (11.6% y/y) while backlogs excluding the transportation sector improved 0.3% (6.6% y/y). Electrical equipment backlogs edged 0.2% higher (15.0% y/y) and unfilled orders of computers & electronic products gained 0.5% (6.2% y/y). Unfilled orders of furniture improved 0.7% (11.2% y/y) but machinery backlogs slipped 0.2% (+9.8% y/y), the third straight month of slight decline.

Inventories in the factory sector ticked 0.1% higher (3.6% y/y) as they did in October. In the durable goods sector, inventories rose 0.4% (6.2% y/y) driven by a 1.3% gain (-1.9% y/y) in electrical equipment inventories. Transportation equipment inventories gained 0.9% (10.2% y/y) and primary metals inventories rose 0.8% (8.8% y/y). Amongst nondurable goods industries, inventories declined 0.4% (-0.5% y/y). The value of petroleum inventories dropped 3.3% (-10.9% y/y) and food products inventories were off 0.2% (+0.3% y/y). Apparel inventories jumped 3.3% (28.3% y/y) and basic chemicals edged 0.2% higher (1.2% y/y).

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

Factory Sector- NAICS Classification (%) Nov Oct Sep Y/Y 2013 2012 2011
New Orders -0.7 -0.7 -0.5 -1.0 2.7 2.9 12.9
Shipments -0.6 -0.9 0.1 0.2 2.0 4.0 12.1
Inventories 0.1 0.1 0.2 3.6 2.3 2.4 10.2
Unfilled Orders 0.4 0.5 0.4 11.6 7.0 3.7 10.0
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