U.S. Factory Orders Strengthen

Manufacturing sector orders improved 0.2% during March following a 1.2% February gain, revised from 1.0%. Durable goods orders increased 0.9% (4.8% y/y), revised from the advance report of a 0.7% gain. Transportation sector orders rose 2.6% (4.5% y/y) with a roughly one-third jump in both nondefense aircraft & parts as well as defense aircraft & parts. Total factory sector orders excluding defense eased 0.2% (+6.4% y/y) following a 1.4% gain. Orders outside of the transportation sector fell 0.3% (+6.1% y/y). Bookings for computers & electronic products eased 0.8% (+4.0% y/y). Machinery orders improved 0.3% (5.4% y/y), while electrical equipment orders strengthened 1.2% (5.2% y/y).

Total factory sector shipments eased 0.1% (+5.3% y/y). Durable goods shipments improved 0.3% (3.8% y/y). Transportation equipment shipments improved 0.4% (2.1% y/y), but auto shipments declined 0.4% (-18.4% y/y). Nondefense aircraft shipments jumped 4.6% (-0.5% y/y) and reversed February's decline. Defense aircraft & parts shipments increased 1.7% (-4.2% y/y). Excluding the transportation sector, shipments eased 0.2% (+6.0% y/y). Shipments of machinery increased 0.7% (2.4% y/y) and computer & electronic product shipments eased 0.4% (+6.4% y/y).

Nondurable goods shipments (which equal orders) weakened 0.5% (+6.9% y/y). Petroleum refinery shipments declined 2.8% (+32.1% y/y). Basic chemical shipments eased 0.3% (+3.2% y/y) and textile mill shipments fell 2.1% (+2.5% y/y). Food product shipments posted a 0.3% rise (4.1% y/y) and paper product shipments jumped 1.0% (1.8% y/y).

Unfilled orders rose 0.3% (-1.0% y/y), but continued the weak trend in place since 2015. Backlogs in the transportation sector rose 0.3% (-2.7% y/y). Outside of the transportation sector, unfilled orders improved 0.3% (2.8% y/y). Electrical equipment & appliance backlogs increased 0.8% (9.0% y/y) and computer & electronic product backlogs inched 0.1% higher (4.5% y/y). Unfilled orders for machinery improved 0.3% (-1.6% y/y).

Inventories at the factory level were little changed (1.4% y/y) in March. Outside of the transportation sector, inventories also remained steady (2.3% y/y). Durable goods inventories gained 0.2% both m/m and y/y, but fabricated metals inventories declined 0.3% (+0.4% y/y). Machinery inventories strengthened 0.6% (0.1% y/y), while inventories of computers & electronic products remained steady (0.8% y/y). Electrical equipment inventories increased 1.2% (2.9% y/y), the fourth strong gain in as many months.

The factory sector figures are available in Haver's USECON database.