Global| Mar 31 2010U.S. Factory Inventories Continue To Accumulate
by:Tom Moeller
|in:Economy in Brief
Summary
In what probably is a voluntary trend, factory inventories are accumulating. Manufacturers raised inventory levels by 0.5% last month after a 0.3% gain during January. The increase was part of a trend that has raised inventories by [...]
In what probably is a voluntary trend, factory inventories are accumulating. Manufacturers raised inventory levels by 0.5% last month after a 0.3% gain during January. The increase was part of a trend that has raised inventories by 0.6% during the last three months after an 8.7% drop during all of 2009. Much of that reversal reflects the upturn in oil prices which has raised inventory values held at refineries by 40.9% y/y. Excluding oil, factory inventories nevertheless rose 0.3% in February. A slight decline during the last three months contrasts with a 10.3% rate of decumulation last year. Machinery inventories slipped 0.1% and by 1.5% during the last three months versus a 13.6% decline last year. Electrical equipment inventories were roughly unchanged for the month. Their 0.3% three-month decline reverses an 18.1% drop last year. Similarly, inventories of computers & electronic products rose 0.6% and by 0.8% during the last three months after a 9.1% decline in 2009.
Factory orders rose 0.6% last month and by 4.6% since November after a 17.2% drop during 2009. However, the latest gain also was increased by higher oil prices. Excluding oil (where orders equal shipments), orders still were firm and rose 0.9% (7.0% y/y) after a 2.5% January increase. Orders for primary metals have been notably strong and were up by one-third y/y. Machinery orders rose 5.1% last month and their three-month change of 1.6% compares to a 25.0% drop last year. Electrical equipment orders remain under some pressure but the 3.0% decline since November is slower than a 19.2% drop during all of last year. Orders for computers & electronic products rose 1.4% during the last three months after a moderate 7.6% decline last year.
Factory shipments slipped 0.1% last month after a modest January gain. Nevertheless, the three-month gain of 2.3% follows a 15.2% drop last year. Higher oil prices played a role in the turnaround. Yet excluding oil, shipments rose 2.2% over the last three months after a 12.2% decline last year. Machinery shipments staged a reversal of 1.4% since November after the 20.1% decline in 2009. Also, a 0.4% three-month slip in shipments of electrical equipment compares to an 18.5% drop last year. Primary metals shipments increased 2.3% in February and by 10.8% since November with higher prices. Furniture shipments rose a modest 1.1% since November after the 18.9% drop last year.
The Manufacturers' Shipments, Inventories and Orders (MSIO) data are available in Haver's USECON database.
| Factory Survey (NAICS, %) | February | January | December | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Inventories | 0.5 | 0.3 | -0.2 | -5.6 | -8.7 | 2.2 | 3.7 |
| Excluding Transportation | 0.6 | 0.2 | -0.1 | -5.9 | -9.2 | -0.5 | 2.7 |
| New Orders | 0.6 | 2.5 | 1.5 | 10.5 | -17.2 | 0.0 | 1.9 |
| Excluding Transportation | 0.7 | 0.5 | 1.5 | 9.2 | -15.8 | 3.0 | 1.2 |
| Shipments | -0.1 | 0.7 | 1.8 | 6.1 | -15.2 | 1.6 | 1.2 |
| Excluding Transportation | 0.3 | 1.0 | 1.3 | 7.1 | -15.3 | 3.5 | 1.5 |
| Unfilled Orders | 0.5 | 0.2 | -0.9 | -6.5 | -10.2 | 3.4 | 17.1 |
| Excluding Transportation | 0.3 | 0.1 | 0.4 | -3.6 | -8.4 | -1.4 | 8.2 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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