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Economy in Brief

U.S. Factory Sector Orders Slip; Inventories Decline Again
by Tom Moeller  March 5, 2015

New orders in the manufacturing sector slipped 0.2% (-2.3% y/y) following a little-revised 3.5% December decline. The fall was the sixth in as many months and roughly matched expectations in the Action Economics Forecast Survey for a 0.3% slip.

Durable goods orders increased 2.8% last month and were up 5.5% y/y. The gain was unrevised from the advance durable goods figure. Transportation orders jumped 9.7% (8.3% y/y) as nondefense aircraft orders surged. Machinery orders gained 1.4% (-2.4% y/y) and computers & electronic equipment orders improved 1.7% (6.1% y/y). Electrical equipment bookings, however, dropped 3.8% (+0.5% y/y). Orders for nondurable goods (which equal shipments) declined 3.1% (-9.1% y/y) as the value of petroleum shipments fell 11.7% (-36.7% y/y) due to lower prices. Basic chemical shipments declined 1.3% (-3.1% y/y). Apparel shipments fell 2.1% (+15.1% y/y) and food product shipments slipped 0.2% (+3.9% y/y). Durable goods shipments declined 1.0% (+5.7% y/y) led by a 1.5% fall (3.5% y/y) in machinery shipments. Electrical equipment & appliance shipments were off 0.7% (+4.2% y/y).

Unfilled orders declined 0.2% (+9.8% y/y) while backlogs excluding the transportation sector slipped 0.1% (+5.9% y/y). Machinery backlogs declined 0.3% (+5.3% y/y) and unfilled orders for transportation equipment also fell 0.3% (+12.2% y/y). Order backlogs of computers & electronic products gained 0.5% (7.6% y/y) while unfilled orders of furniture edged 0.1% higher (10.7% y/y).

Inventories were off 0.4% (+2.0% y/y) following a like decline in December. Inventories excluding the transportation sector fell 0.6% (+0.3% y/y). Nondurable goods inventories led the decline with a 1.7% fall (-4.3% y/y) that reflected an 10.2% drop (-19.2% y/y) in petroleum inventories. Nondurable inventories excluding oil slipped 0.1% (+1.3% y/y). Basic chemical inventories fell 0.6% (-0.1% y/y) but apparel inventories gained 1.7% (26.7% y/y). Textile mill inventories edged 0.4% lower (+1.2% y/y) and paper products inventories gained 0.5% (3.0% y/y).

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

Factory Sector- NAICS Classification (%) Jan Dec Nov Y/Y 2014 2013 2012
New Orders -0.2 -3.5 -1.7 -2.3 2.8 2.7 2.9
Shipments -2.0 -0.9 -1.0 -2.1 2.3 2.0 4.0
Inventories -0.4 -0.4 0.0 2.0 2.5 2.3 2.4
Unfilled Orders -0.2 -0.9 0.2 9.8 9.9 7.0 3.7
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