U.S. Factory Orders Rebound in February Following Two Straight M/M Declines
Summary
- February manufacturers’ new orders +1.4% (1.0% y/y), larger than expected.
- Rebounds in durable goods orders (1.3%), nondurable goods orders (1.6%), and shipments (1.4%).
- Unfilled orders hold steady for the second consecutive month.
- Inventories rise 0.3%, the first m/m increase since September.
Total factory orders rose a more-than-expected 1.4% m/m (1.0% y/y) in February after declines of 3.8% in January and 0.3% in December, data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected a 0.9% m/m February increase. The February reading was the first m/m gain since November. Notably, orders for nondefense aircraft & parts rebounded 24.6% in February following a 63.5% plunge in January. Factory orders excluding defense rose 1.8% (1.2% y/y) in February after a 4.2% decrease in January and factory orders excluding the transportation sector rose 1.1% (0.2% y/y) after a 0.6% January decline; both posted the first m/m rise in three months.
Durable goods orders increased 1.3% (2.6% y/y) in February following a 6.9% drop in January (in line with a 1.4% m/m rise for February in the advance report on March 26). The February increase reflected m/m orders rebounds of 3.3% (5.5% y/y) in transportation equipment, 1.8% (1.1% y/y) in machinery, 1.1% (-2.2% y/y) in furniture & related products, 0.8% (3.3% y/y) in fabricated metal products, and 0.7% (-0.7% y/y) in primary metals. To the downside, durable goods orders for electrical equipment, appliances & components fell 2.1% (+0.8% y/y) in February following three successive m/m rises and durable goods orders for computers & electronic products fell 1.4% (+3.4% y/y), the first m/m fall since July 2023.
Nondurable goods orders, which equal nondurable goods shipments, rose 1.6% (-0.5% y/y) in February, the first m/m rise since September, after a 0.8% decrease in January. The February rise reflected m/m increases of 6.3% (-3.5% y/y) in petroleum & coal products, 5.5% (-3.4% y/y) in apparel, 2.7% (13.7% y/y) in leather & allied products, 1.4% (-1.7% y/y) in textile products, 0.8% (0.4% y/y) in basic chemicals, 0.3% (10.7% y/y) in beverage & tobacco products, 0.2% (0.7% y/y) in plastics & rubber products, and 0.1% (-2.1% y/y) in paper products. To the downside, the following nondurable goods shipments fell m/m in February: textile mills (-0.5%; -5.2% y/y), food products (-0.2%; -0.7% y/y), and printing (-0.2%; -2.8% y/y).
Total shipments grew 1.4% (0.6% y/y) in February, the first m/m increase since November, after a 0.8% decrease in January. Excluding transportation, shipments rose 0.9% (0.1% y/y), up for the first time in three months, after a 0.3% January decline. Shipments of durable goods industries recovered 1.2% (1.8% y/y) in February, the first m/m increase in three months, following a 0.7% drop in January. The February increase reflected m/m durable goods shipments rises of 4.0% (3.5% y/y) in transportation equipment, 1.6% (0.5% y/y) in nonmetallic mineral products, 0.6% (-0.9% y/y) in primary metals, 0.5% (3.2% y/y) in fabricated metal products, and 0.2% (1.2% y/y) in computers & electronic products. In contrast, the following durable goods shipments dropped m/m in February: electrical equipment, appliances & components (-1.8%; +2.4% y/y), wood products (-1.0%; -0.4% y/y), machinery (-0.8%; +0.9% y/y), furniture & related products (-0.7%; -1.2% y/y), and miscellaneous durable goods (-0.1%; +0.3% y/y).
Unfilled orders were virtually unchanged m/m (9.2% y/y) for the second straight month in February after rising during the March-December 2023 period. Excluding transportation, unfilled orders dipped 0.1% (-0.8% y/y) in February, the fourth m/m decline in five months, after a 0.3% drop in January. Backlogs of durable goods held essentially steady m/m (9.2% y/y) in February as categories in durable goods unfilled orders posted no change, a 0.1% uptick and minimal declines of 0.1%-0.2%.
Inventories grew 0.3% (-0.2% y/y) in February, the first m/m gain since September, following a 0.1% downtick in January. Excluding transportation, inventories were up 0.2% (-1.2% y/y) after a 0.4% January decline. Durable goods inventories rose 0.3% (1.3% y/y) in February, the seventh consecutive m/m rise; nondurable goods inventories rebounded 0.2% (-2.7% y/y), the first m/m increase since September.
The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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