March 2022 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 March increased $12.6 billion or 2.3 percent to $556.4 billion. Durable goods shipments increased $3.8 billion or 1.4 percent to $274.8 billion, led by transportation equipment. Meanwhile, nondurable goods shipments increased $8.8 billion or 3.2 percent to $281.5 billion, led by petroleum and coal products. Shipments of wood products were unchanged; paper: +0.1%.

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Inventories increased $10.4 billion or 1.3 percent to $797.6 billion. The inventories-to-shipments ratio was 1.43, down from 1.45 in February. Inventories of durable goods increased $3.8 billion or 0.8 percent to $483.4 billion, led by transportation equipment. Nondurable goods inventories increased $6.6 billion or 2.2 percent to $314.1 billion, led by petroleum and coal products. Inventories of wood products expanded by 0.8%; paper: +0.2%.

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New orders increased $11.8 billion or 2.2 percent to $557.3 billion. Excluding transportation, new orders rose by $11.4 billion or 2.5% (+14.4% YoY). Durable goods orders increased $3.0 billion or 1.1 percent to $275.8 billion, led by computers and electronic products. New orders for non-defense capital goods excluding aircraft -- a proxy for business investment spending -- rose by $1.0 billion or 1.3% (+10.3% YoY). New orders for nondurable goods increased $8.8 billion or 3.2 percent to $281.5 billion.

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Unfilled durable-goods orders increased $5.5 billion or 0.4 percent to $1,294.8 billion, led by transportation equipment. The unfilled orders-to-shipments ratio was 6.72, down from 6.74 in February. Real (inflation-adjusted) unfilled orders, which -- prior to the pandemic -- had been a good litmus test for potential sector growth, show a less-positive picture; in real terms, unfilled orders in June 2014 were back to 103% of their December 2008 peak. Real unfilled orders then jumped to 111% of the prior peak in November 2014, thanks to the largest-ever batch of aircraft orders. However, 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.