September 2020 Manufacturers’ Shipments, Inventories, and New & Unfilled Orders

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According to the U.S. Census Bureau, the value of manufactured-goods shipments in September increased $1.6 billion or 0.3% to $482.8 billion. Durable goods shipments increased $0.9 billion or 0.4% to $245.2 billion, led by transportation equipment. Meanwhile, nondurable goods shipments increased $0.7 billion or 0.3% to $237.6 billion, led by beverage and tobacco products. Shipments of wood products rose by 3.1%; paper: +0.1%.

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Inventories increased $0.2 billion or virtually unchanged to $686.7 billion. The inventories-to-shipments ratio was 1.42, down from 1.43 in August. Inventories of durable goods increased $1.4 billion or 0.3% to $421.8 billion, led by transportation equipment. Nondurable goods inventories decreased $1.3 billion or 0.5% to $264.9 billion, led by petroleum and coal products. Inventories of wood products rose by 0.8%; paper: +0.2.

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New orders increased $5.2 billion or 1.1% to $475.0 billion. Excluding transportation, new orders rose by $2.1 billion or 0.5% (-1.5% YoY). Durable goods orders increased $4.4 billion or 1.9% to $237.4 billion, led by transportation equipment. New orders for non-defense capital goods excluding aircraft -- a proxy for business investment spending -- increased by $0.7 billion or 1.0% (+6.1% YoY). New orders for nondurable goods increased $0.7 billion or 0.3% to $237.6 billion.

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Unfilled durable-goods orders decreased $2.5 billion or 0.2% to $1,075.9 billion, led by transportation equipment. The unfilled orders-to-shipments ratio was 6.59, down from 6.60 in August. Real unfilled orders, which had been a good litmus test for sector growth, show a less positive picture; in real terms, unfilled orders in June 2014 were back to 97% of their December 2008 peak. Real unfilled orders then jumped to 102% of the prior peak in July 2014, thanks to the largest-ever batch of aircraft orders. Since then, however, real unfilled orders have been trending sideways-to-down.

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.