U.S. Factory Orders Rise More Than Expected in May
Summary
• New orders +1.6% in May vs. +0.7% in Apr., up for the eighth straight month; Apr. orders revised up.
• Shipments gain 1.8% with rises of 2.3% in nondurable goods and 1.4% in durable goods.
• Inventories rise at a faster pace while unfilled orders increase at a slower pace.
Total factory orders rose 1.6% m/m (14.0% y/y) in May after rises of 0.7% in April (originally +0.3%) and 1.8% in March, according to the U.S. Census Bureau. The May rise registered the eighth consecutive monthly gain and the 12th in 13 months (-0.3% in September). A 0.5% May increase had been expected in the Action Economics Forecast Survey. Factory orders excluding the transportation sector advanced 1.7% (13.5% y/y) after a 0.6% April increase, continuing their string of gains since March 2021's 0.8%.
Durable goods orders grew 0.8% (10.8% y/y) in May after a 0.4% increase in April (+0.7% in the advance report for May), led by monthly orders rises of 3.1% (13.5% y/y) in primary metals, 1.2% (10.6% y/y) in machinery, 1.0% (16.5% y/y) in transportation equipment, 0.9% (1.8% y/y) in furniture & related products, 0.5% (5.8% y/y) in computers & electronic products, and 0.2% (8.4% y/y) in fabricated metal products. Electrical equipment & parts orders, however, fell for the second consecutive month in May, falling 1.0% (+6.4% y/y) following a 0.9% April decline and two straight monthly gains.
Total shipments rose 1.8% (15.0% y/y) in May, the 15th straight m/m rise, after a 0.6% gain in April. Excluding transportation, shipments grew 1.8% (14.8% y/y) after a 0.6% increase. Shipments of durable goods industries rose 1.4% (12.8% y/y), the ninth successive m/m rise, after a 0.3% increase. Shipments gained across all key industry groups, notably by increases of 2.7% (21.1% y/y) in primary metals and 2.1% (16.2% y/y) in transportation equipment, with the exception of a 0.2% decline (+3.3% y/y) in wood products.
Nondurable goods orders, which equal nondurable goods shipments, increased 2.3% (17.3% y/y) in May, the fifth consecutive m/m gain, on top of a 0.9% rise in April. The May increase was led by rises of 8.9% (66.3% y/y) in petroleum & coal products, 2.7% (16.7% y/y) in beverage & tobacco products, 2.0% (5.9% y/y) in textile products, 0.8% (7.5% y/y) in basic chemicals, and 0.7% (9.4% y/y) in leather & allied products. In contrast, nondurable goods shipments for the following items posted m/m drops in May: apparel (-3.7%; +1.7% y/y), plastic & rubber products (-0.3%; +10.0% y/y), textile mills (-0.3%; +3.4% y/y), and food products (-0.2%; +5.0% y/y).
Unfilled orders rose 0.4% (7.3% y/y) in May, the 17th straight m/m rise, after a 0.5% advance in April. Excluding transportation, unfilled orders were up 0.2% (8.0% y/y) after a 0.3% increase. The May rise was led by gains of 0.5% (11.3% y/y) in machinery, 0.5% (6.8% y/y) in transportation equipment, and 0.2% (4.9% y/y) in computer & electronic products but partly offset by a 1.0% decline (+6.0% y/y) in furniture & related products.
Inventories grew 1.3% (11.1% y/y) in May after a 0.8% rise in April, continuing their string of increases since October 2020. Excluding transportation, inventories jumped 1.6% (12.9% y/y), the fastest m/m rise since April 2011, after a 0.8% gain. Inventories of durable goods increased 0.6% (9.9% y/y) and inventories of nondurable goods advanced 2.3% (13.1% y/y).
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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