October 2011 Manufacturers’ Shipments, Inventories and New Orders

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According to the U.S. Census Bureau, the value of shipments and inventories were mostly higher in October for the sectors and industries we track, while new orders fell.
 

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Shipments increased for a fifth month, by $2.6 billion (0.6 percent) to $455.4 billion. Durable goods shipments increased $3.2 billion (1.6 percent) to $203.9 billion, led by transportation equipment. Shipments of nondurable goods decreased $0.7 billion (0.3 percent) to $251.5 billion following four consecutive monthly increases. Petroleum and coal products led the decrease. Wood and Paper shipments both rose -- by 1.6 and 0.4 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 1.7 percent increase in not-seasonally adjusted rail shipments in October (relative to September), and a comparable rise from a year earlier. Seasonal adjustments trimmed the 1.7 percent September-to-October increase to a 0.5 percent gain, however. Interestingly, rail shipments of forest products fell in October.

The PCI, which tracks diesel use for over-the-highway trucking, rose 1.1 percent on a seasonally and workday adjusted basis in October after three consecutive months of negative numbers. Ed Leamer, PCI chief economist said, “The October data offer some welcome relief from the double-dip fears that were rampant a month ago, but one month does not mean a new trend. Until we get a series of positive months, it remains a she-loves-me, she-loves-me-not economy with bad news followed by good followed by bad.”
 

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Inventories, up 24 of the last 25 months, increased $5.6 billion (0.9 percent) to $607.1 billion -- once again the highest level since the series was first published on a NAICS basis in 1992. The inventories-to-shipments ratio was 1.33, unchanged from September.

Durable goods inventories increased $1.6 billion (0.4 percent) to $366.9 billion, led by transportation equipment. Inventories of nondurable goods increased $3.9 billion (1.7 percent) to $240.2 billion; petroleum and coal products led the increase. Forest products inventories also rose, by 0.7 percent (Wood) and 0.1 percent (Paper).
 

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New orders, down two consecutive months, decreased $1.6 billion (0.4 percent) to $450.0 billion in October. Excluding transportation, new orders increased 0.2 percent.

Durable goods orders decreased $0.9 billion (0.5 percent) to $198.5 billion, led by transportation equipment; new orders for nondurable goods decreased $0.7 billion (0.3 percent) to $251.5 billion.