Global| Apr 04 2007U.S. Factory Orders Continue to Disappoint
Each month the factory order report is a re-issue of durable goods from the week before with (usually) minor revisions plus a new look at nondurable goods shipments and inventories. This month the durable goods order gain was trimmed from a small rise of 2.5% to an even tinier rise of 1.7% for February following a plunge in January. The new data for February are for nondurable goods. Orders there rose by a meager 0.2% in the month. Over three months they are weak with shipments dropping by 1%. But the good news is that progress on inventory reduction is in train as inventories dropped by 4.4% in February.
The overall trends for the factory sector cut into three month blocks shows some revival in shipments compared to past trends. And there is a relatively sharp fall off in (still high) unfilled orders. Inventories are undergoing a gradual slowing in their build up. New orders continue to drop and at a slightly accelerated pace. Sector detail for nondurables shows a lot of weakness. Beverages are weak as are the Textile Mill and Product sectors. For Textiles inventory reduction is being achieved at a very rapid pace. Apparel has just turned positive and Leather Goods shows considerable strength. Paper Products and Printing are weak with shipments declining. Petroleum & Coal and Plastics & Rubber also are seeing shipment declines. Basic Chemicals and Pharmaceuticals & Medicines have turned sharply positive.
These are the readings that are new in the day’s report. They are hardly encouraging.
| Factory Orders | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -3.5% | -9.4% | -5.6% | -1.0% | 6.6% | |
| New Orders | -9.0% | -7.8% | -4.9% | -0.8% | 7.1% | |
| Unfilled Orders | 14.5% | 23.6% | 20.3% | 20.8% | 17.0% | |
| Inventories | 1.0% | 2.8% | 5.0% | 6.4% | 2.5% | |
| Nondurable goods | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -1.0% | -11.8% | -7.8% | -1.3% | 5.0% | |
| Inventories | -4.4% | -3.3% | 0.2% | 2.2% | 4.0% | |
| Nondurable Goods: Orders and Inventories by Industry | ||||||
| Food Products | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | 1.7% | 1.2% | 2.0% | 0.5% | 0.9% | |
| Inventories | -0.9% | 6.3% | 6.3% | 4.5% | 4.3% | |
| Beverages | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -20.7% | -12.9% | -7.4% | 0.1% | 7.4% | |
| Inventories | 3.0% | 3.2% | 1.3% | -0.7% | 4.2% | |
| Textile Mills | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -3.6% | -2.4% | -3.0% | -3.1% | -12.6% | |
| Inventories | -25.3% | -16.2% | -8.1% | -8.8% | -7.9% | |
| Textile Products | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -4.1% | -8.6% | -11.9% | -8.5% | 3.9% | |
| Inventories | -11.6% | -9.2% | -1.3% | -2.6% | -0.6% | |
| Apparel | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | 0.8% | 3.7% | -8.6% | -1.9% | 8.0% | |
| Inventories | 7.4% | -22.6% | -12.4% | -9.2% | -1.1% | |
| Leather & Allied Products | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | 105.8% | 14.9% | 16.7% | 10.1% | -2.9% | |
| Inventories | 23.4% | 7.4% | 15.1% | 11.9% | -9.0% | |
| Paper Products | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -2.6% | -5.5% | -5.3% | -1.5% | 1.1% | |
| Inventories | 5.8% | 2.9% | 0.4% | 1.9% | -1.9% | |
| Printing | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -7.0% | 0.4% | 1.1% | 3.5% | -3.1% | |
| Inventories | -15.8% | -16.6% | -2.0% | 0.7% | -2.1% | |
| Petroleum&Coal | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -1.3% | -32.7% | -23.7% | -5.3% | 17.2% | |
| Inventories | -15.5% | -30.4% | -19.2% | 4.5% | 16.3% | |
| Basic Chemicals | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | 4.7% | -10.3% | -5.9% | 0.2% | 4.0% | |
| Inventories | -0.4% | -1.0% | 1.7% | 1.9% | 2.9% | |
| Pharmaceuticals & Medicine | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | 19.6% | -6.5% | -6.8% | 6.3% | -1.0% | |
| Inventories | -7.4% | -1.1% | 5.5% | 11.0% | -4.6% | |
| Plastics & Rubber Products | 3Mo | 6Mo | 9Mo | 12Mo | Year Ago | |
| Shipments | -6.6% | -12.5% | -7.0% | -3.7% | 7.0% | |
| Inventories | 6.5% | 5.0% | 1.0% | 0.7% | 4.6% | |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
