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Economy in Brief

U.S. Factory Orders Rise as Durables Strengthen
by Tom Moeller  May 2, 2019

Manufacturers' orders surged 1.9% (2.0% y/y) during March following a 0.3% February decline, revised from -0.5%. A 1.3% rise had been expected in the Action Economics Forecast Survey. Orders for durable goods rose 2.6% (2.1% y/y), revised from the advance report of a 2.7% gain issued last week. Transportation equipment orders jumped 7.0% (1.2% y/y) paced by a one-third surge in civilian aircraft & parts orders which more than recaptured February's decline. Factory orders excluding the transportation sector improved 0.8% (2.1% y/y), the largest increase since May 2018. Electrical equipment & parts orders rose 0.5% (2.6% y/y) after two months of stronger gains, but machinery bookings improved just 0.1% (3.6% y/y) after a 0.9% decline.

Orders for nondurable goods, which equal shipments, increased 0.7% in March (3.5% y/y) following a 0.5% rise. Shipments outside of the transportation sector rose 0.7%, with y/y growth of 2.7%, down from 8.8% y/y in June 2018. A 6.3% increase (4.3% y/y) in petroleum shipments powered the rise as prices strengthened. Food product shipments eased 0.3% (-0.9% y/y) and apparel demand inched 0.1% higher (1.3% y/y). Shipments of textile products fell 0.7% (+4.1% y/y) and basic chemical shipments rose 0.4% (3.8% y/y). Shipments of durable goods improved 0.5% (5.1% y/y). Computer & electronic product shipments eased 0.4% (+6.9% y/y) but electrical equipment shipments rose 0.4% (3.5% y/y). Transportation equipment shipments rose 1.1% (7.2% y/y) following two months of decline.

Order backlogs in the manufacturing sector rose 0.2% (2.9% y/y) and recovered February's drop. Transportation equipment backlogs rebounded 0.4% (2.5% y/y) after a 0.3% fall. Unfilled orders outside of transportation eased 0.1% (+3.8% y/y) following a 0.2% decline. The backlog of orders for electrical equipment & appliances was little changed (0.7% y/y) while computer & electronic component backlogs rose 0.5% (4.1% y/y). Unfilled orders for primary metals strengthened 0.2% (9.2% y/y) for a second month. Unfilled orders for fabricated metals fell 0.6% (+5.5% y/y). Machinery order backlogs eased 0.2% (+1.4% y/y).

Factory inventories increased 0.4% (3.9% y/y) after rising 0.3% during February. Transportation sector inventories nudged 0.1% higher (4.8% y/y) and inventories outside of transportation rose 0.5% (3.7% y/y). Electrical equipment inventories rose 0.5% (9.5% y/y) following four straight months of even stronger increase. Computer & electronic product inventories improved 0.4% (0.5% y/y) after three months of little change. Machinery inventories strengthened 1.0% (5.8% y/y). Primary metals inventories declined 0.6% (+6.9% y/y) while electrical equipment inventories rose 0.5% (9.5% y/y).

The factory sector figures are available in Haver's USECON database. The expectation figure is in the AS1REPNA database.

Factory Sector (% chg) - NAICS Classification Mar Feb Jan Mar Y/Y 2018 2017 2016
New Orders 1.9 -0.3 -0.0 2.0 7.2 5.7 -2.9
Shipments 0.7 0.5 -0.3 3.5 6.8 5.0 -3.2
Unfilled Orders 0.2 -0.2 0.1 2.9 3.8 2.0 -1.2
Inventories 0.4 0.3 0.5 3.9 3.5 4.5 -0.7
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