The Manufacturers' Shipments, Inventories, and Orders report shows factory new orders increased 1.7% for September. Without transportation equipment, new orders decreased -0.2%. August showed an overall -0.1% decline in new orders whereas July had a -2.8% plunge. For Q3 factory orders looks none too good. The Census manufacturing statistical release is called Factory Orders by the press and covers both durable and non-durable manufacturing orders, shipments and inventories.
Transportation equipment new orders increased 12.9% , but the increase is volatile aircraft new orders. Motor vehicles bodies & parts new orders declined by -0.7%, whereas nondefense aircraft new orders increased 57.7% and these two sectors are the majority of transportation equipment manufacturing.
Manufactured durable goods new orders, increased 3.8% for September, yet August durable goods new orders only increased 0.5% and July had a massive plunge, -8.1% in durable goods new orders leading to a negative Q3 for the sector.
Nondurable goods new orders decreased -0.2%, August -0.6%, but will have a positive quarter as July nondurable new orders grew by 2.3%.
Core capital goods new orders decreased -1.3% for September after a 1.0% increase in August and a -3.5% plunge in July. Core capital goods are capital or business investment goods and excludes defense and aircraft. This implies a negative Q3 for investment and is probably the worst news in manufacturing.
Graphed below are the revised durable goods news orders up to September. Notice that durable goods new orders are just now hitting pre-recession 2008 levels.
Shipments overall increased 0.1%, buoyed by computer related shipments, which increased 3.9% in September. Core capital goods shipments are bad for Q3 and in turn Q3 GDP. Core capital goods shipments declined by -0.2% in September whereas August 's 1.4% increase with July's -1.4% change canceled each other out to no change. Below is a graph of core capital goods shipments.
Inventories for manufacturing overall increased 0.4%, while August showed a 0.2% increase, July 0.3%. Declines in new orders and shipments with increasing inventories might indicate a correction down the road. For the immediate quarter, this is better news, yet might also be a sign of stockpiling as demand overall weakens. This is with petroleum and coal nondurables having a -0.5% change in inventories for September.
Petroleum and coal products, down following four consecutive monthly increases, led the decrease, down $0.3 billion or 0.5 percent to $49.7 billion.
The inventory to shipments ratio is increasing. September the ratio was 1.30 whereas August was 1.29. This is another sign that factory orders have weak demand, although the ratio is still low enough to imply sluggishness, versus an oncoming train wreck such as another recession.
Unfilled Orders in durable goods increased 0.9% overall with core capital goods unfilled orders increasing by 0.6% in September.
Part of this report goes into calculating GDP. The BEA takes this report, called M3, and uses the shipments values to calculate investment in private equipment, investment in software. Manufacturing inventories also goes into the changes in private inventories GDP calculation. At the bottom of this post is a little more information to estimate part of the GDP investment component.
The St. Louis Federal Reserve FRED graphing system has added individual NAICS data series from this report. If you're looking for a graph of some particular NAICS category, such as light trucks, autos & parts, or machinery, it might be found on FRED. Most news outlets source the Commerce Department, while technically correct, also makes it impossible for you, our beloved detailed reader, to find the actual statistical report and data which you might be focused in on.
There is much more detail in the statistical tables published by the Census website for manufacturing statistics.