January 2023 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 January increased $3.8 billion or 0.7% to $547.8 billion. Durable goods shipments decreased $0.1 billion or virtually unchanged to $277.4 billion, led by transportation equipment. Meanwhile, nondurable goods shipments increased $3.9 billion or 1.5% to $270.4 billion, led by petroleum and coal products. Shipments of wood products rose by 0.7%; paper: +1.1%.

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Inventories increased $0.4 billion or virtually unchanged to $808.3 billion. The inventories-to-shipments ratio was 1.48, down from 1.49 in December. Inventories of durable goods decreased $0.3 billion or 0.1% to $493.3 billion, led by transportation equipment. Nondurable goods inventories increased $0.7 billion or 0.2% to $315.0 billion, led by food products. Inventories of wood products shrank by 0.8%; paper: -0.2%.

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New orders decreased $8.9 billion or 1.6% to $542.8 billion. Excluding transportation, new orders rose by $5.3 billion or 1.2% (+4.3% YoY). Durable goods orders decreased $12.8 billion or 4.5% to $272.4 billion, led by transportation equipment. New orders for non-defense capital goods excluding aircraft -- a proxy for business investment spending -- advanced by $0.6 billion or 0.8% (+5.5% YoY). New orders for nondurable goods increased $3.9 billion or 1.5% to $270.4 billion.

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Unfilled durable-goods orders increased $0.3 billion or virtually unchanged to $1,157.0 billion, led by transportation equipment. The unfilled orders-to-shipments ratio was 6.07, up from 6.06 in December. 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 110% of the prior peak in November 2014, thanks to the largest-ever batch of aircraft orders. Real unfilled orders trended lower after November 2014, although more-recent data hint at a possible upturn.

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.