Global| Feb 03 2015U.S. Factory Sector Orders Improve in 2014 but Weaken Near Yearend
by:Tom Moeller
|in:Economy in Brief
Summary
During all of last year, new orders to manufacturers rose a steady 2.8%. During December, however, forward momentum lost steam. New orders fell 3.4% (-3.6% y/y) following a revised 1.7% November decline, last month reported as -0.7%. [...]
During all of last year, new orders to manufacturers rose a steady 2.8%. During December, however, forward momentum lost steam. New orders fell 3.4% (-3.6% y/y) following a revised 1.7% November decline, last month reported as -0.7%. The decline was the fifth consecutive drop and exceeded expectations in the Action Economics Forecast Survey for a 2.2% shortfall.
Durable goods orders declined 3.3% last month and were up 0.4% y/y. This report included slight revisions to the advance durable goods figures. Industry declines were widespread. Transportation orders fell 9.1% (-7.1% y/y), machinery orders declined 3.2% (-5.6% y/y) and computers & electronic equipment orders fell 1.6% (+6.4% y/y). Electrical equipment bookings, however, improved 1.0% (2.1% y/y). Orders for nondurable goods (which equal shipments) declined 3.4% (-7.1% y/y) as the value of petroleum shipments fell 15.7% (-29.9% y/y) due to lower prices. Basic chemical shipments declined 0.3% (-4.4% y/y). To the upside, apparel shipments rose 1.7% (16.9% y/y) and food product shipments gained 0.8% (5.7% y/y). Durable goods shipments improved 1.3% (6.0% y/y) led by a 3.7% rise (10.6% y/y) in transportation equipment shipments. Electrical equipment & appliance shipments slipped 0.1% (+4.5% y/y).
Unfilled orders declined 0.8% (+10.1% y/y) while backlogs excluding the transportation sector were off 0.3% (+6.2% y/y). Machinery backlogs declined 1.1% (+7.3% y/y) and unfilled orders for transportation equipment fell 1.1% (+12.4% y/y). Order backlogs of computers & electronic products gained 0.4% (7.1% y/y) while unfilled orders of furniture improved 0.8% (9.8% y/y).
Inventories were off 0.3% (+2.7% y/y), the first monthly decline since May 2014. Inventories excluding the transportation sector fell 0.5% (+1.0% y/y). Nondurable goods inventories led the decline with a 1.5% fall (-2.1% y/y) that reflected an 8.8% drop (-19.2% y/y) in petroleum inventories. Basic chemical inventories fell 0.6% (+0.3% y/y) but apparel inventories gained 0.5% (24.2% y/y). Textile mill inventories improved 0.5% (2.9% y/y) and paper products inventories rose 0.3% (2.8% y/y).
The factory sector figures are available in Haver's USECON database.
| Factory Sector- NAICS Classification (%) | Dec | Nov | Oct | Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| New Orders | -3.4 | -1.7 | -0.7 | -3.6 | 2.8 | 2.7 | 2.9 |
| Shipments | -1.1 | -1.0 | -0.9 | -0.9 | 2.2 | 2.0 | 4.0 |
| Inventories | -0.3 | 0.0 | 0.1 | 2.7 | 2.7 | 2.3 | 2.4 |
| Unfilled Orders | -0.8 | 0.2 | 0.5 | 10.1 | 10.1 | 7.0 | 3.7 |
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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