April 2021 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 April increased $1.8 billion or 0.4% to $487.8 billion. Durable goods shipments increased $1.5 billion or 0.6% to $249.0 billion, led by primary metals. Meanwhile, nondurable goods shipments increased $0.2 billion or 0.1% to $238.9 billion, led by chemical products. Shipments of wood products rose by 1.3%; paper: +1.0%.

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Inventories increased $2.4 billion or 0.3% to $723.6 billion. The inventories-to-shipments ratio was 1.48, unchanged from March. Inventories of durable goods increased $2.3 billion or 0.5% to $441.8 billion, led by transportation equipment. Nondurable goods inventories increased $0.1 billion or virtually unchanged to $281.8 billion, led by beverage and tobacco products. Inventories of wood products rose by 1.3%; paper: +0.8%.

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New orders decreased $2.9 billion or 0.6% to $485.2 billion. Excluding transportation, new orders rose by $2.0 billion or 0.5% (+24.1% YoY). Durable goods orders decreased $3.2 billion or 1.3% to $246.3 billion, led by transportation equipment. New orders for non-defense capital goods excluding aircraft -- a proxy for business investment spending -- increased by $1.6 billion or 2.2% (+27.0% YoY). New orders for nondurable goods increased $0.2 billion or 0.1% to $238.9 billion.

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Unfilled durable-goods orders increased $1.8 billion or 0.2% to $1,196.9 billion, led by fabricated metal products. The unfilled orders-to-shipments ratio was 6.84, down from 7.00 in March. Real unfilled orders, which had been a good litmus test for sector growth, show an even more-negative picture; in real terms, unfilled orders in June 2014 were back to 103% of their December 2008 peak. Real unfilled orders then jumped to 109% of the prior peak in July 2014, thanks to the largest-ever batch of aircraft orders. Except for the year-long run up during 2019, real unfilled orders have been trending lower since November 2014.

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.