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.

Here is the summary from this week’s Monday Economic Report:

The U.S. economy appears to be stabilizing, with several reports showing stronger-than-expected increases in activity, including the latest jobs numbers release on March 8. Nonfarm payrolls rose by 236,000 in February, well above the consensus estimate of around 155,000, and the unemployment rate dropped to 7.7 percent. Manufacturers hired an additional 14,000 workers for the month, which was in-line with the average monthly gain over the course of the past year. However, losses in several sectors offset some of the gains in manufacturing employment. Ideally, we could see stronger job growth, even as these numbers represent a good start. We need to see broad-based manufacturing hiring growth, with the sector creating an average of 20,000 jobs each month. This is consistent with the “20/20 vision” outlined by National Association of Manufacturers (NAM) President and CEO Jay Timmons in his Detroit Economic Club keynote speech last month.

The Federal Reserve Board’s Beige Book noted the “modest to moderate” pace of growth in the economy since its last report, citing strengths in housing and consumer spending in particular. Growth in manufacturing activity was more mixed, as we have seen in recent sentiment surveys from various regional Federal Reserve Banks. In addition to weaknesses in sales and production, respondents mentioned federal budget cutbacks, the regulatory environment and “the unknown effects of the Affordable Care Act” as roadblocks to their competitiveness. This suggests a degree of skittishness in hiring, which might be reducing the overall job growth numbers mentioned above. Nonetheless, the larger Beige Book findings suggest an economic environment that is improving, with wage and pricing pressures under control, at least for now. (continue reading…)

The Census Bureau reported that new orders for manufactured goods were up 1.8 percent in December. The increase was driven primarily by higher sales of aircraft and ships, similar to what we saw when from the advanced data on durable goods sales last week. In fact, if you were to exclude transportation equipment from the analysis, new orders would have risen just 0.2 percent, essentially offsetting the 0.2 percent loss for non-transportation orders experienced the month before.

Breaking this figure down, durable goods orders (including transportation) were up 4.3 percent; whereas, nondurable goods sales were off 0.3 percent. Core capital goods orders (e.g., nondefense capital goods excluding aircraft) were down 0.3 percent, as well, reflecting significant weaknesses at year’s end in the manufacturing marketplace.

Other durable goods sectors with higher sales in December included computers and electronic products (up 4.1 percent), primary metals (up 3.2 percent), fabricated metal products (up 1.3 percent), and furniture and related products (up 0.8 percent). There were decreased levels of new orders observed in the electrical equipment and appliances (down 3.1 percent) and machinery (down 1.1 percent), among others.

Meanwhile, shipments of manufactured goods rose 0.4 percent, the fourth consecutive month of higher levels and its highest level since July 2008. Durable and nondurable goods shipments were up 1.1 percent and down 0.3 percent. For the durables, the stronger industries matched the ones discussed above for new orders, with transportation shipments more muted (up 1.4 percent). In the nondurable categories, gaining sectors were in leather and allied products (up 2.9 percent), food products (up 0.5 percent), and textile mills (up 0.5 percent).

Chad Moutray is chief economist, National Association of Manufacturers.

The Census Bureau reported that new orders for manufactured goods fell a dramatic 5.2 percent in August. Some of this decline is not news, as it had already been announced last week that durable goods orders were down 13.2 percent. The bulk of this decline came from the fact that there were no nondefense aircraft orders reported in August. Motor vehicle, defense aircraft, and shipbuilding numbers were also weaker. Overall, transportation orders declined 34.9 percent.

If you exclude transportation from the analysis, new orders would have risen 0.7 percent in August. This increase clearly came from the nondurables sector, which saw a 2.2 percent gain for the month. The declines among durable goods sectors were fairly broad-based, with the electrical equipment and appliances sector being the lone major component with increased sales in August (up 3.8 percent). Decreases were observed in the machinery (down 5 percent), computers and electronic products (down 3.4 percent), primary metals (down 2.1 percent), fabricated metal products (down 0.4 percent), and furniture (down 0.4 percent) sectors.

Meanwhile, shipments of manufactured goods decreased 0.3 percent in August. Once again, the transportation sector led the durable goods statistics lower (down 2.9 percent). Nondurable goods shipments rose 2.2 percent. Petroleum and coal products shipments increased 6.9 percent, making it the fastest gainer in the nondurable goods sector.

Chad Moutray is chief economist, National Association of Manufacturers.  

The Census Bureau reported that new orders for manufactured goods rose 2.8 percent in July, reversing the 0.5 percent decline in June. A strong increase in transportation sales lifted durable goods orders by 4.1 percent, outpacing the 1.5 percent gain from nondurable goods.

Illustrating the impact of higher motor vehicle and nondefense aircraft orders on this figure, manufacturing new orders would have risen by just 0.7 percent without these sectors. This was noted a week ago when advanced data for durable goods was released.

The strongest sector for new orders in July was primary metals, which was up 2.9 percent. Most of the other major sub-industries were lower, including machinery (down 4.1 percent), electrical equipment and appliances (down 2.2 percent), fabricated metal products (down 0.8 percent), furniture and related products (down 0.4 percent), and computers and electronic products (down 0.2 percent).

Meanwhile, shipments of manufactured goods increased 2 percent in July. As with new orders, the bulk of this gain stemmed from transportation, which jumped 8.6 percent. Other leading sectors for shipments were beverage and tobacco products (up 3.7 percent), apparel (up 2.3 percent), petroleum and coal products (up 2.3 percent), chemical products (up 1.7 percent), primary metals (up 1.3 percent), and computers and electronic products (up 1.1. percent). Note the large presence of nondurables in this list, which helped to lift nondurable goods shipments by 1.5 percent.

The other key data point released today came from the Midwest. The latest ISM-Chicago report found slower growth in the region, with its Business Barometer down from 53.7 in July to 53.0 in August. With that said, the various components were mixed. Order backlogs and supplier deliveries were both contracting at their slowest paces since the second half of 2009. Yet, there were improvements in production, new orders, employment, and capital equipment spending. Cost pressures appear to be accelerating, though. (continue reading…)

The Census Bureau reported that new orders for manufactured goods fell 1.5 percent in March, reversing last month’s 1.1 percent gain. This was a result of a steep decline in nondefense aircraft orders, as we noted last week with the release of advance durable goods data. When the transportation sector is excluded, new orders were flat.

Nondurable goods orders did better than durables in March, with new nondurable goods sales up 0.5 percent. Many of the major durable goods sectors had losses, including primary metals (down 2 percent), machinery (down 1.9 percent), computers and electronic products (down 1.7 percent) and furniture and related products (down 0.5 percent). The one area of strength for the month was among electrical equipment and appliances (up 2.7 percent); although, this was a reversal of the 2.7 percent decline in February.

Shipments data were more positive, with both durable and nondurable goods higher (up 0.9 percent and 0.5 percent, respectively). Core capital goods (nondefense capital goods excluding aircraft) rose a strong 2.6 percent. Sectors with the strongest gains in shipments in March included machinery (up 6.5 percent), electrical equipment and appliances (up 2.3 percent) and transportation equipment (up 1.2 percent).

These numbers were mostly in-line with estimates and reflect recent weaknesses in the sector.

Chad Moutray is chief economist, National Association of Manufacturers.

This morning the Census Bureau released the report on May Manufacturers’ Shipments, Inventories and Orders. After a decrease in April new orders for manufactured goods increased 0.8 percent or by $3.5 billion. However, the report had some concerning news in that new orders for manufactured nondurable goods decreased 0.2 percent or $0.4 billion. 

Additional numbers from the May report:

• Shipments increased 0.1 percent or $0.4 billion.
• Inventories increased 0.8 percent or $4.5 billion.
• New orders for manufactured durable goods increased 2.1 percent or $4.0 billion.
• Shipments of manufactured durable goods increased 0.4 percent or $0.9 billion.
• Inventories of manufactured durable goods increased 1.3 percent or $356.1 billion. 
• Inventories of manufactured nondurable goods decreased by 0.1 percent or $0.2 billion.

Earlier today, the U.S. Census Bureau released final factory order numbers from April, with new orders down 1.2 percent from March.  Much of this analysis was discussed in greater detail in a blog post last week with the release of preliminary durable goods orders, which declined 3.6 percent. The transporation sector took the largest hit, falling 9.3 percent (revised from 9.5 percent in the preliminary analysis). Excluding transporation, new orders dropped 0.2 percent. New orders for nondurable goods rose 0.6 percent. Unfilled orders grew 0.3 percent, and inventories were up for 16 straight months.

Overall, this analysis confirms the larger trend seen in April and May data. Manufacturing output fell dramatically in those months, largely due to supply chain and other issues. Yesterday’s ISM numbers for May were weak, especially given the strength of the sector earlier this year. But, the good news is that the ISM numbers were mostly above 50 (except for inventories) — a sign that the sector is still growing, albeit much slower than before.  Tomorrow, we will see employment numbers that will continue to reflect this weakness, perhaps mirroring the decline in manufacturing employment seen in the recent ADP numbers.

Interestingly, yesterday I participated in a webinar to discuss the economy for RSM McGladrey. The firm recently released the Spring 2011 Manufacturing & Distribution Monitor, which surveys firms on their current business outlook. As we have seen in recent regional Federal Reserve Bank surveys, while current economic indicators are negative, the longer-term forecast is more positive. This represents a juxtoposition of views that might be difficult for people to reconcile (unless they see the current bad news as a temporary one). The McGladrey survey, for instance, finds that 90 percent of its respondents have a favorable view of the business environment and over half want to hire new workers in the next 12 months. This is positive news that hopefully bodes well for future releases regarding manufacturing, production, and employment.

This morning the Census Bureau released the report on April’s manufacturers’ shipments, inventories and orders. The report shows more evidence, on top of what we saw yesterday, that manufacturing has cooled in the past few months.

Below are some of the key numbers from the report:

• New orders of manufactured goods decreased $5.5 billion or 1.2 percent to $440.5 billion.
• Excluding transportation new orders decreased 0.2 percent.
• Shipments were down $0.9 billion or 0.2 percent to $444.5 billion.
• Unfilled orders increased $2.5 billion or 0.3 percent.
• Inventories increased just $7.7 billion or 1.3 percent to $587.8 billion.

New orders for manufactured goods edged down 0.5 percent in August, the Commerce Department reported today.  After growing faster than the overall economy during the first year of the recovery, manufacturing has clearly downshifted into low gear.

Today’s report marks the second decline in factory orders in the past three months.  Much of the overall August decline was due to a 40.2 percent plunge in volatile non-defense aircraft orders, which tend to fluctuate from month-to-month.

Orders in the rest of manufacturing actually rose 0.4 percent in August, due chiefly to rebounds in machinery, computers and electronic products. But even with these increases, orders in these areas have slowed considerably from earlier in 2010, signaling that business investment will not likely continue to be the catalyst for economic growth as it was in the second quarter of the year.

Continued declines in new orders for construction materials and supplies and consumer goods show that housing and consumer spending have similarly weakened now that much of the temporary boost from several fiscal stimulus measures has ended.

The weak status of the labor market and increased uncertainty – stemming from possible federal tax and regulatory changes that are looming – will likely weigh down the recovery going forward.