December 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 December increased $0.3 billion or virtually unchanged to $581.0 billion. Durable goods shipments decreased $0.9 billion or 0.3% to $282.1 billion, led by transportation equipment. Meanwhile, nondurable goods shipments increased $1.2 billion or 0.4% to $298.9 billion, led by food products. Shipments of wood products decreased 0.3%; paper: +0.3%.

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Inventories increased $1.0 billion or 0.1% to $857.7 billion. The inventories-to-shipments ratio was 1.48, unchanged from November. Inventories of durable goods increased $1.9 billion or 0.4% to $526.9 billion, led by transportation equipment. Nondurable goods inventories decreased $0.9 billion or 0.3% to $330.8 billion, led by petroleum and coal products. Inventories of wood products shrank by 0.7%; paper: +0.1%.

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New orders increased $1.2 billion or 0.2% to $594.3 billion. Excluding transportation, new orders rose by $2.2 billion or 0.4% (-0.1% YoY). Durable goods orders decreased less than $0.1 billion or virtually unchanged to $295.4 billion, led by transportation equipment. New orders for non-defense capital goods excluding aircraft -- a proxy for business investment spending -- advanced by $0.1 billion or 0.2% (+0.9% YoY). New orders for nondurable goods increased $1.2 billion or 0.4% to $298.9 billion.

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Unfilled durable-goods orders increased $18.2 billion or 1.3% to $1,393.2 billion, led by transportation equipment. The unfilled orders-to-shipments ratio was 7.08, up from 6.96 in November. Real (inflation-adjusted) unfilled orders, which -- prior to the pandemic -- had been a good litmus test for potential sector growth, show a more-muted picture; in real terms, unfilled orders in June 2014 were back to 104% of their December 2008 peak. Real unfilled orders then jumped to 110% of the prior peak in February 2015, thanks to the largest-ever batch of aircraft orders. Real unfilled orders trended lower through 2020, but now seem to be exhibiting a quickening trend.

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.