U.S. Factory Orders Fall in December on Weak Nondefense Aircraft Orders
Summary
- December factory orders -0.7% m/m (+4.3% y/y); still 7.2% above the Jan. ’24 low.
- Durable goods -1.4% m/m; nondurable goods orders flat; shipments +0.5% m/m.
- Transportation orders -5.4% m/m, led by a 24.8% plunge in nondefense aircraft orders.
- Unfilled orders +0.9%, the fifth straight m/m rise.
- Inventories +0.1%, the second consecutive m/m increase.
Total factory orders unexpectedly fell 0.7% m/m in December after a 2.7% gain in November and a 1.2% drop in October, according to data from the U.S. Census Bureau. December marked the second m/m fall in three months following m/m increases in September and August. The Action Economics Forecast Survey had expected a 0.8% m/m December increase. The year-on-year growth rate slowed to 4.3% in December from 5.4% in November (-1.8% in December 2024), while remaining far below a peak of 39.6% in April 2021. Notably, orders for nondefense aircraft & parts plunged 24.8% m/m in December after a 98.2% surge in November and a 17.9% drop in October. Factory orders excluding defense fell 1.2% (+3.8% y/y) following a 3.2% November rebound. Factory orders excluding the transportation sector rose 0.4% (1.2% y/y), the third m/m rise in four months, after a 0.1% November uptick. For all of 2025, factory orders gained 4.0% after a 0.5% decline in 2024 and a 0.3% increase in 2023.
Durable goods orders fell 1.4% (+10.1% y/y) in December after a 5.4% rebound in November (matching -1.4% m/m in the advance report on February 18). The December m/m fall was led by a 5.4% orders drop (+20.2% y/y) in transportation equipment following a 15.2% November jump. Other major durable goods orders categories rose m/m, led by a 3.1% gain (7.4% y/y) in computers & electronic products, followed by increases of 2.1% (9.1% y/y) in primary metals, 0.9% (3.5% y/y) in fabricated metal products, 0.5% (10.0% y/y) in machinery, 0.3% (4.0% y/y) in electrical equipment, appliances & components, and 0.1% (4.5% y/y) in furniture & related products.
Nondurable goods orders, which equal nondurable goods shipments, were essentially unchanged (-1.4% y/y) in December after a 0.1% dip in November (the fourth successive m/m decline). The flat December reading reflected m/m increases of 2.1% (-0.7% y/y) in textile products, 1.9% (0.3% y/y) in apparel, 0.6% (3.4% y/y) in beverage & tobacco products, 0.6% (4.3% y/y) in chemical products, 0.3% (-0.1% y/y) in paper products, and 0.2% (-0.3% y/y) in food products. To the downside, the following nondurable goods shipments declined m/m in December: petroleum & coal products (-1.3%; -13.4% y/y), textile mills (-1.0%; -1.4% y/y), leather & allied products (-0.5%; -7.8% y/y), and printing (-0.4%; -1.2% y/y). Meanwhile, shipments for plastics & rubber products were virtually unchanged (+0.5% y/y) after a 0.4% November rebound.
Total shipments rose 0.5% (2.2% y/y) in December, the second m/m rise in three months, following a 0.2% decline in November. Excluding transportation, shipments increased 0.4% (1.0% y/y), the third m/m gain in four months, after a 0.1% November uptick. Shipments of durable goods industries recovered 1.0% (5.8% y/y), also up for the third time in four months, after a 0.3% November decline. This reflected m/m durable goods shipments gains of 2.5% (7.2% y/y) in primary metals, 1.4% (8.8% y/y) in transportation equipment, 1.3% (8.1% y/y) in machinery, 0.7% (4.6% y/y) in fabricated metal products, 0.6% (5.1% y/y) in computers & electronic products, and 0.5% (1.2% y/y) in nonmetallic mineral products. Durable goods shipments for furniture & related products (-0.3%; +4.0% y/y) and wood products (-0.3%; -3.9% y/y) fell m/m in December, while durable goods shipments for electrical equipment, appliances & components (+2.4% y/y) and miscellaneous durable goods (+2.3% y/y) were flat m/m.
Unfilled orders rose 0.9% (10.3% y/y) in December on top of a 1.4% advance in November, registering the fifth consecutive m/m rise and the seventh in eight months. Excluding transportation, unfilled orders grew 0.4% (1.6% y/y), the strongest of five straight m/m increases, after a 0.3% November rise. Backlogs of durable goods rose 0.9% (10.3% y/y) in December, led by m/m gains of 1.2% (16.1% y/y) in transportation equipment and 1.0% (3.7% y/y) in electrical equipment, appliances & components, partially offset by a 0.1% decline (+2.2% y/y) in primary metals.
Inventories edged up 0.1% (0.9% y/y) in December after a 0.2% rise in November and no change in October. Excluding transportation, inventories inched up 0.1% (1.2% y/y), the seventh m/m increase in eight months, after a 0.1% November uptick. Durable goods inventories grew 0.3% (1.5% y/y), the third successive m/m gain, after a 0.2% November rise, while nondurable goods inventories fell 0.2% (-0.1% y/y), the third m/m fall in four months, after a 0.1% November increase.
The factory sector data are available in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 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. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~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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