May 2013 Manufacturers’ Shipments, Inventories and New & Unfilled Orders

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According to the U.S. Census Bureau, the value of manufactured-goods shipments increased $4.6 billion (1.0 percent) to $483.6 billion in May. Durable goods shipments increased $2.8 billion (1.3 percent) to $229.8 billion, led by transportation equipment.

Shipments of nondurable goods increased $1.8 billion (0.7 percent) to $253.8 billion, led by petroleum and coal products. Wood shipments advanced by 0.2 percent, but Paper retreated by 0.3 percent.  

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Data from the Association of American Railroads (AAR) and the American Trucking Associations’ (ATA) advance seasonally adjusted For-Hire Truck Tonnage Index help round out the picture on goods shipments. AAR reported an 18.9 percent decrease in not-seasonally adjusted rail shipments in June (relative to May), and a 0.3 percent drop from a year earlier; on a trend-line basis, total shipments were off 1.2 percent from a year earlier. Excluding coal carloads, year-over-year shipments were up 1.3 percent. Seasonal adjustments reversed the 18.9 percent May-to-June decrease, turning it into a 1.2 percent increase. Rail shipments of forest-related products were higher in June than a year earlier, thanks largely to a 3.3 percent rise in pulp and paper products shipments. The ATA’s advance index showed a 2.3 percent jump in May. 

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Inventories increased $0.3 billion to $627.8 billion, the highest level since the series was first published on a NAICS basis in 1992. The inventories-to-shipments ratio was 1.30.

Durable goods inventories increased $0.4 billion (0.1 percent) to $377.7 billion (also the highest level since the series was first published on a NAICS basis), led by computers and electronic products. Inventories of nondurable goods decreased $0.1 billion to $250.1 billion, led by chemical products.

Wood inventories rose by 1.7 percent, but paper declined by 0.2 percent. 

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New orders increased $9.9 billion (2.1 percent) to $485.0 billion; excluding transportation, new orders increased 0.6 percent. Durable goods orders increased $8.2 billion (3.7 percent) to $231.2 billion, led by transportation equipment. New orders for nondurable goods increased $1.8 billion (0.7 percent) to $253.8 billion. 

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Unfilled orders increased $8.2 billion (0.8 percent) to $1,004.8 billion; the unfilled orders-to-shipments ratio 6.21, down from 6.28 in April. Durable goods increased $8.2 billion (0.8 percent) to $1,004.8 billion, led by transportation equipment. Real (i.e., inflation adjusted) unfilled orders, a good litmus test for sector growth, have regained roughly half the ground given up during the Great Recession.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.