Haver Analytics
Haver Analytics
| Apr 04 2023

U.S. Factory Orders Fall for the Third Time in Four Months in February

  • February new orders (-0.7%), durable goods orders (-1.0%), nondurable goods orders (-0.4%), and shipments (-0.5%) all drop m/m for the third time in four months.
  • Unfilled orders dip 0.1%, the first m/m decline since August ’20.
  • Inventories ease 0.1% for the second consecutive month.

Total factory orders fell 0.7% m/m (+2.7% y/y) in February after a 2.1% drop in January (-1.6% originally) and a 1.7% increase in December, according to the U.S. Census Bureau. The February m/m fall was the third in four months. A 0.5% m/m February decline had been expected in the Action Economics Forecast Survey. Factory orders excluding the transportation sector slid 0.3% (+2.6% y/y) following a 0.8% January rebound.

Durable goods orders dropped 1.0% (+2.2% y/y) in February, down for the third month in four, on top of a 5.0% decrease in January (-1.0% for Feb. unrevised from the advance report on March 24). The February drop reflected m/m orders declines of 2.8% (+3.5% y/y) in transportation equipment, 0.6% (+2.9% y/y) in machinery, and 0.3% (+4.5% y/y) in furniture & related products. To the upside, orders for electrical equipment, appliances & components (0.7%; 7.7% y/y), fabricated metal products (0.2%; -1.4% y/y), computers & electronic products (0.1%; 3.8% y/y), and primary metals (0.1%; 0.2% y/y) posted their m/m increases in February.

Total shipments slid 0.5% (+4.4% y/y) in February, the third m/m slide in four months, after a 0.3% increase in January (+0.7% originally). Excluding transportation, shipments fell 0.3% (+3.0% y/y) vs. a 0.9% January rise. Shipments of durable goods industries dropped 0.6% (+5.5% y/y) following a 0.4% January decline and 16 straight m/m advances. The February slide reflected m/m shipments drops of 1.5% (+2.3% y/y) in furniture & related products, 1.4% (+12.2% y/y) in transportation equipment, 1.1% (+8.0% y/y) in electrical equipment, appliances & components, 0.6% (+1.3% y/y) in miscellaneous durable goods, 0.5% (-3.5% y/y) in wood products, and 0.2% (+5.0% y/y) in machinery. In contrast, shipments for the following industry groups rose in February with a marginal 0.1% m/m increase each: computers & electronic products (4.5% y/y), nonmetallic mineral products (3.3% y/y), primary metals (1.1% y/y), and fabricated metal products (0.0% y/y).

Nondurable goods orders, which equal nondurable goods shipments, fell 0.4% (+3.3% y/y) in February, the third monthly fall in four months, after a 1.1% increase in January. The February fall reflected m/m drops of 3.9% (+22.3% y/y) in leather & allied products, 3.5% (+2.8% y/y) in petroleum & coal products, 1.5% (+4.9% y/y) in apparel, 0.6% (+14.3% y/y) in beverage & tobacco products, and 0.4% (-4.7% y/y) in textile mills. To the upside, nondurable goods shipments for the following groups registered m/m increases in February: basic chemicals (0.8%; 3.1% y/y), printing (0.6%; 7.5% y/y), food products (0.5%; 2.8% y/y), textile products (0.3%; -1.4% y/y), paper products (0.1%; 0.9% y/y), and plastics & rubber products (0.1%; 0.1% y/y).

Unfilled orders eased 0.1% (+5.5% y/y) in February, the first m/m decline since August 2020, after holding steady in January. Excluding transportation, unfilled orders dipped 0.1% (+1.2% y/y) for the second successive month. Backlogs of durable goods also eased 0.1% (+5.5% y/y), led by a 0.3% decline (-0.8% y/y) in fabricated metal products.

Inventories slipped 0.1% (+4.6% y/y) in February after posting the same m/m rate in January. Excluding transportation, inventories fell 0.2% (+5.0% y/y) following a 0.1% January downtick. Durable goods inventories rebounded 0.2% (4.7% y/y) in February, the 24th m/m increase in 25 months, while nondurable goods inventories were down 0.5% (+4.3% y/y) after virtually unchanged in January.

The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.

  • Winnie Tapasanun has been working for Haver Analytics since 2013. She has almost 20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations.   Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia.   A bilingual (English and Thai) with competency in French, Winnie loves to travel (almost 30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.

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