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Tuesday, June 2, 2015

April 2015 Manufacturers’ Shipments, Inventories, and New & Unfilled Orders

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According to the U.S. Census Bureau, the value of manufactured-goods shipments was virtually unchanged at $482.4 billion in April. Shipments of durable goods decreased $0.5 billion or 0.2% to $240.1 billion, led by primary metals. Meanwhile, nondurable goods shipments increased $0.5 billion or 0.2% to $242.3 billion, led by chemical products. Wood shipments fell by 1.6% while Paper rose 0.8%. 
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Inventories increased $0.6 billion or 0.1% to $649.0 billion. The inventories-to-shipments ratio was 1.35, up from 1.34 in March.
Inventories of durable goods increased $0.8 billion or 0.2% to $401.6 billion (the highest level since the series was first published on a NAICS basis in 1992), led by transportation equipment. Nondurable goods inventories decreased $0.2 billion or 0.1% to $247.4 billion, led by chemical products. Inventories of Wood expanded by 0.5% while Paper contracted by 0.2%.

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New orders decreased $1.8 billion or 0.4% to $476.7 billion (-0.1% expected). Excluding transportation, new orders increased 0.1%. Durable goods orders decreased $2.3 billion or 1.0% to $234.4 billion, led by transportation equipment. New orders for nondurable goods increased $0.5 billion or 0.2% to $242.3 billion.
Prior to July 2014, as can be seen in the graph above, real (inflation-adjusted) new orders had been essentially flat since early 2012, recouping roughly 75% of the losses incurred since the beginning of the Great Recession. With July’s transportation-led spike now in the rearview mirror, new orders are back to around 63% of their December 2007 high. 
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Unfilled durable-goods orders decreased $1.1 billion or 0.1% to $1,202.4 billion, led by machinery. The unfilled orders-to-shipments ratio was 6.98, down from 6.99 in March. Real unfilled orders, which had been a good litmus test for sector growth, show a much different picture; in real terms, unfilled orders in June 2014 were back to just 79% of their December 2008 peak. Real unfilled orders jumped to 102% of the prior peak in July, thanks to the largest-ever batch of aircraft orders, hence, this metric is likely to remain elevated for several years.
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.

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