Global| Apr 08 2019U.S. Factory Sector Activity Cools Off
by:Tom Moeller
|in:Economy in Brief
Summary
Manufacturers' orders declined 0.5% (+1.5% y/y) during February following little change during January, revised from 0.1%. A 0.1% uptick in orders had been expected in the Action Economics Forecast Survey. Orders for durable goods [...]
Manufacturers' orders declined 0.5% (+1.5% y/y) during February following little change during January, revised from 0.1%. A 0.1% uptick in orders had been expected in the Action Economics Forecast Survey. Orders for durable goods weakened 1.6 % (8.4% y/y), unrevised from the advance report issued last week. A 4.4% decline (-0.6% y/y) in transportation equipment orders paced the decline as civilian aircraft & parts orders fell by roughly one-third. Factory orders excluding the transportation sector improved 0.3% (1.9 % y/y) following three straight months of decline. Electrical equipment & parts orders gained 1.0% (4.2% y/y) but machinery bookings fell 0.6% (+0.5% y/y).
Orders for nondurable goods, which equal shipments, increased 0.6% (1.1% y/y) following three straight months of decline. Shipments outside of the transportation sector rose 0.5% with y/y growth of 2.2%, down from 8.8% y/y as of last June. That reduced rate of increase came despite a 3.2% jump in petroleum shipments as prices strengthened. Food product shipments also improved 0.5% (-0.4% y/y) but apparel demand weakened 1.4% (+1.5% y/y), about the same as in January. Textile product demand fell 0.6% (+5.6% y/y) and the call for basic chemicals eased 0.1% (+3.6% y/y). Shipments of durable goods improved 0.2% (5.5% y/y). Computer & electronic product shipments gained 1.0% (6.5% y/y) and electrical equipment shipments rose 0.4% (3.8% y/y). These gains were offset by a 0.3% decline (+8.5% y/y) in transportation shipments.
Order backlogs in the manufacturing sector fell 0.3% (+3.5% y/y), down for the fourth month in the last five. Transportation equipment backlogs declined 0.4% (+3.0% y/y). Unfilled orders outside of transportation were little changed (+4.5% y/y). The backlog of orders for electrical equipment & appliances declined 0.2% (+1.1% y/y) while computer & electronic component backlogs eased 0.1% (+3.7% y/y). Unfilled orders for primary metals strengthened 0.3% (11.5% y/y) while unfilled orders for fabricated metals also rose 0.%, and by a steady 7.8% y/y.
Factory inventories increased 0.3% (3.6% y/y) after rising 0.5% during January. Transportation sector inventories strengthened 1.0% (4.1% y/y) and inventories outside of transportation ticked 0.1% higher (3.5% y/y). Electrical equipment inventories jumped 0.8% (9.3% y/y) following three straight months of similar strength. Computer & electronic product inventories improved 0.1% but the 0.3% y/y rise compares to 5.1% y/y growth as of December 2017. Computer & electronic product inventories improved 0.1% (0.2% y/y). Primary metals inventories declined 0.4%, but rose a steady 8.4% y/y, while machinery inventories slipped 0.1% (+5.2% y/y).
The factory sector figures are available in Haver's USECON database.
| Factory Sector (% chg) - NAICS Classification | Feb | Jan | Dec | Feb Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| New Orders | -0.5 | -0.0 | 0.1 | 1.5 | 7.2 | 5.7 | -2.9 |
| Shipments | 0.4 | -0.3 | -0.2 | 3.3 | 6.8 | 5.0 | -3.2 |
| Unfilled Orders | -0.3 | 0.1 | -0.1 | 3.5 | 3.8 | 2.0 | -1.2 |
| Inventories | 0.3 | 0.5 | 0.1 | 3.6 | 3.5 | 4.5 | -0.7 |
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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