WASHINGTON – The value of new factory orders saw a 1.6% increase in March, up seven of the last eight months, and rising higher than the 1.4% gain expected by analysts in an MNI survey, data released by the Commerce Department Thursday morning showed.
Inventories were reported to have increased by 0.3% in March. In addition to this, the Commerce Department's advance report on inventories showed a 0.5% increase for wholesale inventories and a 0.4% decrease for retail inventories.
While these data are eligible for revision, the levels as they stand now, combined with the 0.3% rise in factory inventories, would result in a 0.1% rise in March business inventories when that report is released on May 15, an MNI calculation showed. The revised wholesale data for March will be released on May 9 and could alter this projection.
The larger than expected rise in factory orders is in large part due to durable goods rising 2.6%, unrevised from the advance estimate. Durable goods have been up four of the last five months. Only adding to the rise in durable goods orders, nondurable goods orders saw a more mild 0.5% rise.
Leading the rise in the nondurable goods category was petroleum and coal products with a 1.5% increase following a 3.1% decline in February. Softening the increase, there were declines seen in textile mills (-0.3%), textile products (-0.5%), printing (-0.3%), and plastics (-0.2%). There were muted rises for most other categories, while paper products were flat in the month. Nondurable shipments are equivalent to orders in this report.
Factory orders excluding transportation only rose 0.3% in the month This follows the soft gains of 0.2% and 0.4% in February and January, respectively. Despite the muted gains in factory orders excluding transportation, this is the tenth consecutive month of gains.
Transportation orders for March rose 7.6% based on Thursday's data. All but one of the transportation categories were down, with nondefense aircraft and parts being the only driver of the gain for the month, rising 44.5%. The unlisted transportation components rose 2.4% in the month.
Nondefense capital goods new orders rose by 5.8%, however it was down 0.4% when excluding aircraft. Civilian aircraft capital goods was up 43.6% following a 50.2% increase in February. Total goods excluding defense and civilian aircraft was up 0.6%.
Overall factory shipments rose 0.4% in the month due to a 0.4% rise in durable goods shipments and the 0.5% gain in nondurable shipments. Nondefense capital goods shipments saw a rise of 2.1%, however were down 0.8% when excluding the aircraft component.
Since factory inventories rose by 0.3% in the month, compared with the 0.4% increase in shipments, these mild gains kept the inventory-to-shipments ratio at 1.35, making this the fifth consecutive month.
