WASHINGTON – The value of new factory orders saw a 1.7% rise in December, slightly larger than the expected 1.5% increase in an MNI survey, data released by the Commerce Department Friday morning showed.
Nondurable goods orders rose 0.7%, while durable goods orders were revised down slightly to a 2.8% increase from the 2.9% gain reported in the advance estimate.
Petroleum and coal products shipments were up 1.4% in December, leading the increase in nondurables orders. Chemicals (+0.3%), tobacco products (+5.7%), and apparel (+1.6%) also contributed to the increase, with very few declines reported. Nondurables shipments are equivalent to orders in this report.
Total factory orders excluding transportation rose 0.7% in December, following 1.1% and 1.2% rises in November and October, respectively. This increase makes it the seventh consecutive rise. Durable goods orders excluding transportation were up 0.7%, revised up slightly from the 0.6% increase in the advance estimate.
Transportation orders for December increased 7.1% based on Friday's data, a small revision from the 7.4% increase in the advance estimate. Nondefense aircraft and parts orders rose by 15.8% in December and defense aircraft and parts orders were up 54.7%. Motor vehicles orders increased 0.4% in December, while orders for ships and boats fell by 8.3%.
Nondefense capital goods new orders posted a 0.4% decrease, but down further to a 0.6% decline when a a small 1.5% increase in the civilian aircraft capital goods category is excluded.
Overall factory shipments rose 0.6% in the month due to a 0.5% rise in durable goods shipments and a 0.7% increase in nondurables shipments. Nondefense capital goods shipments saw a decrease of 0.5%, but up 0.4% excluding aircraft component.
Factory inventories increased by 0.5% in the month, compared with the 0.6% increase in shipments, making the inventory-to-shipments ratio remain at 1.35 following 1.36 in October and 1.37 in September.
The Commerce Department's advance report on inventories showed a 0.2% increase for wholesale inventories and a 0.2% increase for retail inventories. While these data are eligible for revision, the levels as they stand now, combined with Friday's factory inventory data, would result in a 0.3% increase in December business inventories when that report is released on February 14, an MNI calculation showed. The revised wholesale data for December will be released on February 9 and could alter this projection.
