Manufacturing Shipments and New Orders Fell in August

By October 4, 2011Economy

The Census Bureau reported that new orders and shipments of manufactured goods were down in August. Both were down 0.2 percent for the month, reversing gains in July. Shipments of manufactured goods were up nearly 12 percent over the past year.

Breaking down the sectors, both durable and nondurable goods sectors experienced declines in August, by 0.1 percent and 0.3 percent, respectively. The sectors with the strongest monthly gains were defense and nondefense aircraft, material handling equipment, ferrous metal foundries and household appliances. The largest declining sectors for the month were in mining, oil field and gas field machinery; turbines, generators and other power transmission equipment; ships and boats; and electronic components.

In terms of shipments, strong gains in machinery and electrical equipment were offset by losses in transportation and petroleum products. Note that the decrease in transportation shipments followed increases in July and the preceding months, particularly as the sector has recovered from its supply chain issues. 

Inventories have been up for 20 consecutive months, as they rose 0.9 percent in August.  Unfilled orders were also up 0.9 percent. Transportation led both of these categories with the largest increases.

Overall, this news is not positive for manufacturers. The manufacturing sector continues to suffer from a sluggish economy, hampering growth for the sector. Despite a few areas of growth, fewer new orders and shipments for manufacturers is a sign of trouble for the months ahead. This was echoed in yesterday’s report from the Institute for Supply Management, as well. These figures have been highly volatile all year – up one month and then down the next – and yet, it would be nice to get a good string of increases going.  This will be essential for sustained growth in the manufacturing sector and for the larger economy.

 Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

Join the discussion 2 Comments

  • This is definitely bad news for manufacturers. It’s already hard enough to compete with cheap labour overseas and a sluggish economy helps no one. Hopefully we will see some kind of slow recovery instead of a double dip recession. Fingers crossed!

  • Aly says:

    Hey Chad – Aly, again. The stock-piling of inventories and inability to move orders seems particularly worrying to me. Why do you think these numbers fluctuate so much from month to month?

    As always, thanks for sharing! – Aly

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