February 2012 Manufacturers’ Shipments, Inventories and New Orders

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According to the U.S. Census Bureau, the value of shipments, inventories and new orders were mixed in February for the sectors and industries we track.
 

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Shipments increased for a ninth month, by $0.3 billion (0.1 percent) to $462.6 billion. Despite the overall uptick, durable goods shipments decreased $0.7 billion 0.4 percent) to $206.7 billion, led by transportation equipment. Shipments of nondurable goods made up the difference when increasing $1.1 billion (0.4 percent) to $255.9 billion. Petroleum and coal products drove the increase.

Wood and Paper shipments were down, respectively, 5.0 and 0.2 percent.

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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 23.3 percent increase in not-seasonally adjusted rail shipments in February (relative to January), and a 1.9 percent drop from a year earlier. Seasonal adjustments converted the 23.3 percent January-to-February increase to a 2.9 percent drop, however. Rail shipments of forest-related products were higher overall in February than a year earlier.

The PCI, which tracks diesel use for over-the-highway trucking, rose by 0.7 percent on a seasonally and workday adjusted basis in February -- not enough to offset the 1.7 percent drop in January. “Even with the February increase, the PCI signals that the economy is much weaker than suggested by many other

Indicators,” the PCI report stated. “Specifically, the PCI suggests that the first quarter is shaping up very poorly… With those negatives already known, we will need the PCI to grow by over 4 percent from February to March just to allow the PCI to grow positively in the first quarter of 2012 compared with the last quarter of 2011. That has happened only once in the 157 months since January 1999, the month that the PCI data dates back to. In other words, the PCI indicates a very weak or even negative GDP growth rate in the first quarter of 2012. That’s not a forecast. That is a word of caution regarding our currently exuberant state.”

The PCI’s rise was in line with the American Trucking Associations’ (ATA) advance seasonally adjusted For-Hire Truck Tonnage Index, which rose 0.5 percent in February after falling 4.6 percent in January.
 

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Inventories increased $2.2 billion (0.4 percent) to $616.8 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 January.

Durable goods inventories increased $1.4 billion (0.4 percent) to $373.6 billion, led by machinery. Inventories of nondurable goods increased $0.8 billion (0.3 percent) to $243.2 billion. As with shipments, petroleum and coal products drove the increase.

Forest products inventories rose in February: 0.3 percent for Wood and 0.1 percent Paper.
 

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New orders increased $6.0 billion (1.3 percent) to $468.4 billion. Excluding transportation, new orders increased 0.9 percent. Durable goods orders increased $5.0 billion (2.4 percent) to $212.5 billion, led by transportation equipment. New orders for nondurable goods increased $1.1 billion (0.4 percent) to $255.9 billion.