Global| Sep 02 2020U.S. Factory Orders & Shipments Remain Strong in July
by:Tom Moeller
|in:Economy in Brief
Summary
• Factory orders strength is broad-based. • Motor vehicle shipments are exceptionally strong. • Inventory decumulation is widespread. New orders for manufactured goods increased 6.4% (-6.2% y/y) during July and repeated the June gain, [...]
• Factory orders strength is broad-based.
• Motor vehicle shipments are exceptionally strong.
• Inventory decumulation is widespread.
New orders for manufactured goods increased 6.4% (-6.2% y/y) during July and repeated the June gain, revised from 6.2%. A 5.8% rise had been expected in the Action Economics Forecast Survey. Orders for durable goods increased 11.4% (-4.8% y/y), revised from 11.2% in the advance report issued last month. Transportation equipment orders rose 35.7% (-12.4% y/y). Motor vehicle orders improved 9.4% (3.1% y/y) and defense aircraft bookings strengthened by three-quarters (+16.8% y/y). Electrical equipment & appliance orders rose 4.1%, but fell by the same degree y/y. Orders for fabricated metals rose strongly while machinery orders gained 2.0% (-3.2% y/y).
Nondurable goods orders, which equal shipments, rose 1.8% in July (-7.5% y/y). Shipments from petroleum refineries strengthened 7.5% (-33.8% y/y) as prices rose. Food product shipments edged 0.7% higher (1.2% y/y). Textile product shipments declined 2.8% (-13.4% y/y) but apparel shipments improved 1.0% (-4.0% y/y). Shipments of basic chemicals rose 1.1% (0.6% y/y) after rising 2.7% in June. Shipments of durable goods strengthened 7.5% (-1.3% y/y) as transportation shipments surged 17.9% (-2.9% y/y) with strength in the motor vehicle sector. Factory shipments excluding transportation rose 2.2% (-4.8% y/y). Electrical equipment & appliance shipments rose 2.0% (-4.3% y/y) for a second straight month while shipments of furniture improved 0.7% (-1.0% y/y).
Order backlogs declined 0.8% (-5.5% y/y), off for the fourth month in the last five. Transportation backlogs fell 1.1% (-7.7% y/y). Excluding the transportation sector, unfilled orders improved 0.1% (-0.3% y/y) for a second straight month. Order backlogs of electrical equipment & appliances rose 1.1% (4.9% y/y). Unfilled orders for computers & electronic products eased 0.1% (+0.9% y/y). Machinery order backlogs rose marginally (-0.4% y/y) for a second month.
Inventories of manufactured products fell 0.5% in July (-1.0% y/y). The decline was the first in three months. Transportation sector inventories eased slightly (+10.2% y/y), while outside transportation, inventories were off 0.6% (-3.7% y/y). Furniture inventories fell 0.8% (-3.9% y/y) and electrical equipment & appliance inventories eased 0.2% (-0.5% y/y). Computer & electronic product inventories fell 0.5% (+0.5% y/y) while machinery inventories declined 1.1% (-3.8% y/y), off for the sixth month this year. Inventories of nondurable products declined 0.2% (-4.5% y/y) as petroleum refinery inventories eased 0.2% (-21.9% y/y). Apparel inventories edged 0.1% lower (-1.8% y/y) but food product inventories improved 0.1% (-1.9% 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 | Jul | Jun | May | Jul Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| New Orders | 6.4 | 6.4 | 7.7 | -6.2 | -0.2 | 6.9 | 5.6 |
| Shipments | 4.6 | 10.0 | 3.0 | -4.4 | 0.9 | 6.7 | 4.4 |
| Unfilled Orders | -0.8 | -1.4 | 0.0 | -5.5 | -1.9 | 3.8 | 2.7 |
| Inventories | -0.5 | 0.5 | 0.2 | -1.0 | 2.8 | 3.7 | 4.3 |
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.
More Economy in Brief
