Economy

Factory Orders Grew 1.6% in January

March 2, 2016

Factory orders for manufactured goods grew 1.6 percent in January, following a 2.9 percent decrease in December and showing the largest increase since June. Durable goods orders rose 4.7 percent led by transportation equipment orders that were up 11.4 percent in January. Nondurable goods dropped 1.4 percent to $226.8 billion.

Factory orders came in below Bloomberg and Reuter’s expectations of 2.0 percent for January but still showed strength in January. Bloomberg is less optimistic for February and writes, “The early indications on February are broadly negative for a sector where weak exports, made weaker by the strong dollar, and a collapse in energy spending continue to take a serious toll.”

Shipments of durable goods increased 2 percent in January led by transportation. Shipments of manufactured nondurable goods, down seven consecutive months, fell 1.4 percent. Petroleum and coal products, down seven consecutive months, drove the decrease.

Total inventory value was down 0.4 percent after a 0.2 percent decrease in December, indicating factories were making progress with reducing inventory overhang. Manufactured durable goods were almost unchanged at a decrease of 0.1 percent. Primary metals, down 12 consecutive months, drove the decrease, falling 2.3 percent to $33.5 million. Nondurable goods dropped 0.9 percent, led by a 5.9 percent decline in petroleum and coal products.

The entire US Census bureau report can be accessed here. This survey provides monthly dollar value for manufacturers’ shipments, new orders, unfilled orders, inventory, and inventories by stage of fabrication. Data is derived from U.S. Census Bureau’s Manufacturers’ Shipments, Inventories, and Orders (M3) survey and is based on a panel of approximately 4,800 reporting units that represent approximately 3,000 companies and provide an indication of month-to-month change for the manufacturing sector.