New Factory Orders Were Mostly Lower in March

By May 3, 2013Economy

The Census Bureau said that new orders for manufactured goods fell 4.0 percent in March, more than offsetting the 1.9 percent gain seen in February. Illustrating the current weaknesses in the manufacturing sector in the first quarter of 2013, new orders in March were 3.1 percent lower than in December 2012. Swings in transportation sector sales have explained some of the volatility in the past few months, and this continued in March. Transportation orders were down 15.1 percent for the month. Yet, the decreases were more broad-based than that. Even if the transportation sector was excluded, new orders would have fallen by 2.0 percent.

New orders for durable goods were off 5.8 percent, more than outpacing the 2.4 percent decline in nondurable goods sales. As noted, decreasing new orders were observed across-the-board, with the largest decreases seen in the primary metals (down 3.2 percent), electrical equipment and appliances (down 2.8 percent), fabricated metal products (down 2.4 percent), and machinery (down 0.8 percent) sectors. With that said, new orders for core capital goods (or nondefense capital goods excluding aircraft) rose 0.9 percent, suggesting that there were some pockets of strength outside of the major categories.

Meanwhile, shipments of manufactured goods were off 1.0 percent, its first decline since August. This decrease was primarily in the nondurable goods industries, with shipments down 2.4 percent in that sector. Durable goods shipments increased 0.5 percent.

The sector-by-sector analysis of the shipments was mixed. The largest shipment gains occurred in the beverage and tobacco products (up 3.0 percent), computer and electronic products (up 2.8 percent), and transportation (up 2.3 percent) sectors. Whereas, sectors with the greatest shipment declines in March were petroleum and coal products (down 7.1 percent), primary metals (down 2.0 percent), apparel (down 2.0 percent), nonmetallic mineral products (down 1.9 percent), and plastics and rubber products (down 1.8 percent). The steep decline in petroleum shipments was largely due to lower per barrel costs.

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

Leave a Reply