March 2014 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 $1.4 billion or 0.3 percent to $494.9 billion in March. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.9 percent February increase. Shipments of durable goods increased $2.8 billion or 1.2 percent to $237.1 billion, led by transportation equipment. Meanwhile, nondurable goods shipments decreased $1.4 billion or 0.6 percent to $257.9 billion, led by petroleum and coal products. Wood shipments rose by 1.1 percent while Paper shipments slipped by -0.1 percent.

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Inventories increased $0.6 billion or 0.1 percent to $643.1 billion (the highest level since the series was first published on a NAICS basis). The inventories-to-shipments ratio was 1.30, unchanged from February.

Inventories of durable goods increased $1.2 billion or 0.3 percent to $393.3 billion, led by transportation equipment. Nondurable goods inventories decreased $0.6 billion or 0.2 percent to $249.7 billion, led by petroleum and coal products. Wood inventories rose by 0.6 percent, while Paper followed behind with a 0.4 percent increase. 

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New orders increased $5.3 billion or 1.1 percent to $493.9 billion; excluding transportation, new orders increased 0.6 percent. Durable goods orders increased $6.7 billion or 2.9 percent to $236.0 billion, led by transportation equipment. New orders for nondurable goods decreased $1.4 billion or 0.6 percent to $257.9 billion.

As can be seen in the graph above, real (inflation-adjusted) new orders have been essentially flat since early 2012, and have recouped a little more than two-thirds the losses incurred since the beginning of the Great Recession. 

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Unfilled durable-goods orders increased $6.9 billion or 0.6 percent to a new nominal high of $1,069.3 billion, led by transportation equipment. The unfilled orders-to-shipments ratio was 6.44, down from 6.49 in February. Real unfilled orders, a good litmus test for sector growth, show a much different picture; in real terms, unfilled orders have regained less than 70 percent of 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.