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Economy in Brief

U.S. Factory Orders & Shipments Rebound in March
by Tom Moeller  May 4, 2021

• Factory order gains are broad-based.

• Shipments reverse sharp February decline.

• Order backlogs & inventories continue to move up.

New orders for manufactured goods increased 1.1% in March (16.1% y/y) after February's 0.5% easing. The Action Economics Forecast Survey expected a 1.2% gain.

Orders in durable goods industries rose 0.8% (25.3% y/y) in March, revised from 0.5% in the advance report. Transportation sector orders declined 1.6% (+62.6% y/y) after falling 2.0% in February. Electrical equipment orders fell 1.2% (+7.9% y/y) ) but  machinery orders rose 1.5% (10.2% y/y). The full report on March durable goods activity is available here.

Nondurable goods orders, which equal shipments, increased 1.5% in March (8.1% y/y) after easing 0.1% in February (revised from 0.4% in last month's report). Shipments from petroleum refineries strengthened 4.2% (41.8% y/y) following February's 2.8% rise. Among other nondurable goods sectors, basic chemical shipments improved 0.1% (4.6% y/y) while paper product shipments rose 0.7% (6.4% y/y). Textile mill shipments improved 2.5% (4.5% y/y) while apparel shipments improved 2.2% (4.6% y/y).

Shipments of durable goods rose 2.8% in March (10.3% y/y) and reversed February's decline. Transportation shipments surged 4.9% (11.9% y/y) but shipments of computers & electronic products improved just 0.3% (9.5% y/y) after falling 0.6% in February. Shipments of machinery increased 1.9% (7.2% y/y).

Inventories of manufactured products rose 0.7% in March (2.7% y/y) after a 0.8% February increase. Durable goods inventories increased 1.0% (1.7% y/y). Transportation equipment inventories rose 1.4% (4.5% y/y), while excluding transportation, inventories gained 0.6% (2.3% y/y). Auto inventories strengthened 4.1% (11.7% y/y). Nondurable goods inventories rose 0.3% (4.3% y/y) as petroleum refinery inventories gained 3.0% (32.4% y/y). Textile mill inventories increased 1.0% (-2.8% y/y), while food product inventories rose just 0.1% (1.3% y/y) for a second straight month.

The value of unfilled orders increased 0.4% (-3.3% y/y) following a 0.9% rise. Unfilled orders in the transportation sector were unchanged (-8.3% y/y) and excluding transportation, backlogs jumped 1.3% (7.8% y/y). Computer and electronic product order backlogs rose 0.2% (2.0% y/y) for a second straight month. Electrical equipment & appliances backlogs rose 1.2% (14.3% y/y) while machinery backlogs rose 1.1% (7.7% y/y).

The factory sector data are available in USECON database.

Factory Sector (% chg) - NAICS Classification Mar Feb Jan Mar Y/Y 2020 2019 2018
New Orders 1.1 -0.5 2.7 16.1 -6.7 -0.1 6.8
Shipments 2.1 -1.9 1.8 9.2 -5.7 1.0 6.6
Unfilled Orders 0.4 0.9 0.2 -3.3 -6.4 -1.8 3.9
Inventories 0.7 0.8 0.2 2.7 -0.6 2.8 3.6
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