New Factory Orders Were Down for the Second Straight Month in January

By March 6, 2014Economy

The Census Bureau said that new factory orders declined for the second straight month, down 2.0 percent and 0.7 percent in December and January, respectively. This was not a surprise, particularly given the already-released estimates for durable goods orders and the recent challenges with weather. Much of the decline in January stemmed from reduced auto and defense aircraft sales. As such, new factory orders excluding transportation increased 0.2 percent, indicating a very modest rebound from the 0.1 percent decline the month before.

New durable and nondurable manufactured goods orders were both lower in January, down 1.0 percent and 0.4 percent, respectively. With that said, as noted above, durable goods excluding transportation rose 0.1 percent, indicating broader strength than the headline figure might suggest. Areas of strength in the durable goods sector included fabricated metal products (up 7.4 percent) and computers and electronics (up 3.7 percent). But, these were somewhat offset by reduced new orders for furniture and related products (down 3.6 percent), electrical equipment and appliances (down 2.2 percent), primary metals (down 1.2 percent), and machinery (down 0.7 percent).

Meanwhile, manufactured goods shipments were also lower for the second consecutive month, with declines of 0.3 percent in both December and January. Durable goods shipments were off by 0.3 percent, with nondurable goods down 0.4 percent. Negative weather influences can be seen in this data, particularly to the extent that consumers were not able to get the stores to make purchases.

Sectors with the largest declines in monthly shipments included textile products (down 11.4 percent), textile mills (down 3.8 percent), machinery (down 2.9 percent), automobiles (down 1.8 percent), apparel (down 1.0 percent), and chemical products (down 1.0 percent). In contrast, there were increased shipments observed in the following areas: electrical equipment and appliances (up 1.5 percent), nonmetallic mineral products (up 1.3 percent), food products (up 1.2 percent), computers and electronics (up 0.7 percent), and wood products (up 0.7 percent).

Chad Moutray is the 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

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