Factory Orders Improve, Shipments Lag

New orders for manufactured goods increased $4.6 billion or 1.3 percent to $355.5 billion, the U.S. Census Bureau reported Wednesday. Shipments, unfilled orders and inventories were still down. Orders for nondurable goods fell, offsetting gains for durable goods reported earlier.

July was the fifth of the last six months to see an increase in new orders. A healthy 10 percent increase in automobile sales in July helped push the numbers up. Excluding transportation, new orders decreased 0.7 percent.

New orders for durable goods increased $8.2 billion or 5.1 percent to $169 billion, revised upward from the 4.9 percent increase published in the advance report last week. New orders for nondurable goods reduced the total with a decrease of $3.6 billion or 1.9 percent to $186.5 billion.

Shipments, down eleven of the last twelve months, decreased $0.2 billion to $359.7 billion, following a 1.8 percent June increase. An increase in shipments of durable goods was offset by a deep decline in shipments of nondurable goods, primarily because of a drop in the price of petroleum products.

Shipments of durable goods, up two consecutive months, increased $3.4 billion or 2 percent to $173.3 billion. But shipments of manufactured nondurable goods decreased $3.6 billion or 1.9 percent to $186.5 billion. This followed a 2.8 percent June increase. The decrease was led by petroleum and coal products, which decreased $2.7 billion or 7.2 percent to $34.3 billion.

Unfilled orders extended their longest streak of consecutive monthly decreases to its tenth month, falling $0.1 billion to $740.6 billion. The decline was a slim one following a 0.8 percent June decrease.

Inventories, down eleven consecutive months, decreased $3.6 billion or 0.7 percent to $503.1 billion. While not a record, the streak of consecutive monthly decreases in inventories matches the run from March 2003 to January 2004.

Contact Thomas L. Gallagher at tgallagher@joc.com.