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Economy in Brief

U.S. Factory Orders Decline as Shipments and Inventories Rise in February
by Tom Moeller  April 4, 2022

• Fall in manufactured goods orders is first since April 2021.

• Shipments continue year long gain.

• Unfilled orders and inventories rise further.

Manufacturers' new orders fell 0.5% (+12.6% y/y) during February following a 1.5% January gain, revised from 1.4%. A 0.6% decline had been expected in the Action Economics Forecast Survey. Transportation equipment orders declined 5.3% (+8.7% y/y), weighed down by a 30.4% fall in orders for nondefense aircraft & parts. Orders excluding transportation increased 0.4% (13.4% y/y) after improving 1.2% in January.

Durable goods orders fell 2.1% (10.3% y/y) following a 1.5% gain. The decline compared to a 2.2% fall issued in the advance report. Machinery orders declined 2.9% (+12.3% y/y) and reversed January's 3.0% increase. Orders for computers and electronic equipment fell 1.1% (+4.3% y/y) after rising 0.4% in January while primary metals orders weakened 0.9% (+19.7% y/y) after a 0.3% slip. Electrical equipment orders rose 0.6% (7.8% y/y) after a 0.3% dip.

New orders for nondurable goods, which equal shipments, rose 1.2% (15.1% y/y) in February, following a 1.5% January rise. Shipments from refineries rose 4.6% (47.3% y/y) with higher prices. Apparel shipments gained 0.8% (3.8% y/y) following a 1.2% decline. Basic chemical shipments eased 0.4% (+10.3% y/y) and reversed January's increase.

Total shipments rose 0.6% (13.7% y/y) in February after a 1.4% rise. Shipments excluding transportation rose 0.8% (14.4% y/y) after improving 1.5%. Transportation equipment eased 0.5% (+9.8% y/y) after rising 0.5%. Machinery shipments fell 1.7% (14.9% y/y) after a 3.0% gain. Shipments of computers & electronic products rose 1.2% (6.0% y/y) after sharp increases in the prior two months.

Unfilled orders increased 0.4% (8.4% y/y) in February after a 0.9% rise in January. Excluding transportation, unfilled orders edged 0.1% higher (13.4% y/y) following a 0.5% rise in January. Transportation backlogs increased 0.6% (6.0% y/y) after surging 1.1%. Primary metals backlogs increased 0.4% (15.8% y/y) after a 1.1% rise and unfilled orders of machinery rose 0.3% (16.3% y/y) following a 0.8% rise.

Inventories of manufactured goods rose 0.6% in February (9.7% y/y) after rising 0.8% in January. Transportation equipment inventories edged 0.1% higher (5.5% y/y) while excluding transportation inventories gained 0.8% (10.8% y/y) after a 1.0% rise in January.

The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.

Factory Sector (% chg) - NAICS Classification Feb Jan Dec Feb Y/Y 2021 2020 2019
New Orders -0.5 1.5 0.7 12.6 16.8 -10.4 -0.2
Shipments 0.6 1.4 0.7 13.7 12.7 -6.7 -2.6
Unfilled Orders 0.4 0.9 0.8 8.4 7.7 -8.2 10.2
Inventories 0.6 0.8 0.4 9.7 9.1 -0.5 5.3
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