The Census Bureau reported that new manufactured goods orders rose 1.7 percent in September, the first increase since June. This data has been highly volatile for much of this year, with large shifts in aircraft orders pushing the data up and down. Year-to-date gains in new orders have been very modest, up just 1.1 percent, but when you add in the fourth quarter of last year, the year-over-year pace was a better figure, up 3.0 percent over the past 12 months.
As reported when the durable goods figures were released a couple weeks ago, the increase in new orders stemmed largely from a huge jump in defense and nondefense aircraft orders (both rebounding from significant declines in the previous two months). If you were to exclude transportation orders from the analysis, new orders would have declined 0.2 percent, suggesting broader weaknesses in the manufacturing sector beyond aircraft.
New nondurable goods orders declined 0.2 percent in September. Among the durable goods sectors, the largest monthly increases (outside of aircraft) were among the primary metals (up 2.9 percent) and computer and electronic products (up 1.6 percent) firms. These were offset, however, by declining monthly sales in the machinery (down 2.6 percent), furniture and related products (down 1.4 percent), fabricated metal products (down 1.2 percent), electrical equipment and appliances (down 0.9 percent), and motor vehicle (down 0.7 percent) sectors.
Meanwhile, shipments of manufactured goods increased 0.1 percent, easing from the 1.1 percent and 0.2 percent gains experienced in July and August, respectively. As such, shipments were a nice contrast to new orders in the third quarter, with shipments rising 1.4 percent for the three month period of July to August. New orders fell by 1.3 percent during the same time period. The better shipments news came after a relatively flat first half of the year, as year-to-date shipments growth for the first nine months of 2013 was just 1.3 percent.
With that said, it was also clear that shipments growth for September was slow at best. When you exclude transportation activity, manufactured goods shipments were unchanged for the month. Durable goods shipments were up 0.4 percent in September, with nondurable goods shipments off 0.2 percent. Indeed, the data were largely mixed. Growth in shipments for items like beverages (up 5.1 percent), nondefense aircraft (up 3.9 percent), automobiles (up 1.7 percent), and computers and electronic products (up 0.9 percent) were counteracted by declines or an easing in growth elsewhere.
Chad Moutray is the chief economist, National Association of Manufacturers.
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