May 2011 Manufacturers’ Shipments, Inventories and New Orders

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Shipments, inventories and new orders all rose at the total manufacturing level during May, but put in mixed performances among the individual industries we track, according to the U.S. Census Bureau.
 

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Shipments, up eight of the last nine months, increased $0.4 billion (0.1 percent) to $443.9 billion. Shipments of durable goods increased $0.9 billion (0.4 percent) to $195.0 billion, led by machinery. Nondurable goods shipments decreased $0.4 billion (0.2 percent) to $249.0 billion, dragged lower by petroleum and coal products. Wood and Paper shipments were both off, by 1.4 and 1.0 percent, respectively.
 

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Data from the Association of American Railroads (AAR) and the Ceridian-UCLA Pulse of Commerce Index (PCI) help round out the picture on goods shipments. AAR reported a 1.5 percent drop in not-seasonally adjusted rail shipments in May (relative to April). Shipments were flat on a seasonally adjusted basis.

The PCI (which measures diesel consumption of highway trucking) fell by 0.9 percent in May on a seasonally and workday adjusted basis relative to April. “The index has now declined in four of the first five months of 2011, and in eight of the past twelve months,” said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. “The PCI makes it clear that the high-growth recovery lasted only four quarters from 2009Q3 to 2010Q2. Since then the PCI and the economy have been idling, not powering forward.”
 

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Inventories, up 19 of the last 20 months, increased $4.5 billion (0.8 percent) to $593.0 billion -- the highest level since the series was first published on a NAICS basis in 1992. The inventories-to-shipments ratio was 1.34, up from 1.33 in April.

Inventories of durable goods increased $4.7 billion (1.3 percent) to $356.1 billion, led by transportation equipment. Nondurable goods inventories decreased $0.2 billion (0.1 percent) to $236.9 billion, thanks once again to petroleum and coal products. Wood and Paper inventories both rose, by 2.9 and 0.2 percent, respectively.
 

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New orders for manufactured goods, up two of the last three months, increased $3.5 billion (0.8 percent) to $445.3 billion. Excluding transportation, new orders increased 0.2 percent. New orders for durable goods increased $4.0 billion (2.1 percent) to $196.3 billion; transportation equipment had the largest increase: $2.9 billion (6.3 percent) to $49.9 billion. Nondurable goods orders decreased $0.4 billion (0.2 percent) to $249.0 billion.