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

Click image for larger view

Click image for larger view

According to the U.S. Census Bureau, the value of manufactured-goods shipments increased $0.3 billion or 0.1 percent to $488.9 billion in September. Durable goods shipments increased $0.8 billion or 0.4 percent to $232.4 billion (the highest level since the series was first published on a NAICS basis), led by computers and electronic products.

Shipments of nondurable goods decreased $0.5 billion or 0.2 percent to $256.5 billion, led by petroleum and coal products. Wood and Paper shipments both advanced, by 0.3 and 0.1 percent, respectively.

Click image for larger view

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 a 1.6 percent decrease in not-seasonally adjusted rail shipments in September (relative to August), but a 0.7 percent rise from a year earlier; on a trend-line basis, total shipments were up 1.4 percent from a year earlier. Excluding coal carloads, year-over-year shipments were up 3.0 percent. Seasonal adjustments cut the 1.6 percent August-to-September drop in half (to -0.8 percent). Rail shipments of forest-related products were higher in September than a year earlier, thanks largely to a 9.8 percent rise in lumber & wood products shipments. The ATA’s advance index showed a 1.4 percent jump in September.

Click image for larger view

Inventories increased $2.7 billion or 0.4 percent to $634.0 billion (also the highest level since the series was first published on a NAICS). The inventories-to-shipments ratio was 1.30, up from 1.29 in August.

Durable goods inventories increased $3.1 billion or 0.8 percent to $382.3 billion, led by transportation equipment. Inventories of nondurable goods decreased $0.4 billion or 0.2 percent to $251.7 billion, led by petroleum and coal products.

Wood and Paper inventories decreased by, respectively, 0.5 and 0.1 percent.

Click image for larger view

New orders increased $8.1 billion or 1.7 percent to $490.8 billion; excluding transportation, new orders decreased 0.2 percent. Durable goods orders increased $8.6 billion or 3.8 percent to $234.3 billion, led by transportation equipment. New orders for nondurable goods decreased $0.5 billion or 0.2 percent to $256.5 billion. As can be seen in the graph above, real (inflation-adjusted) new orders have been essentially flat since early 2011, and have recouped only about half the losses incurred since the beginning of the Great Recession.

Click image for larger view

Unfilled durable-goods orders increased $8.8 billion or 0.9 percent to a new nominal high of $1,041.7 billion, led by transportation equipment. The unfilled orders-to-shipments ratio was 6.39, up from 6.36 in August. Real unfilled orders, a good litmus test for sector growth, show a much different picture; in real terms, unfilled orders have regained roughly only half the ground given up since the Great Recession began.

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.