WASHINGTON — The value of new factory orders in February saw a 1.2% increase, a softer rise than the 1.7% increase expected in an MNI survey, data released by the Commerce Department Wednesday morning showed.
Inventories were reported to increase by 0.3% in February. In addition to this, The Commerce Department's advance report on inventories showed a 1.1% increase for wholesale inventories and a 0.4% increase 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 0.6% rise in February business inventories when that report is released on April 16, an MNI calculation showed. The revised wholesale data for February will be released on April 10 and could alter this projection.
The rise in factory orders is mainly due to durable goods rising 3.0%, revised down slightly from the 3.1% reported in the advance estimate. Despite the significant increase in durable goods, nondurable goods softened the rise with a 0.5% decline.
Leading the decline in the nondurable goods category was petroleum and coal products with a 3.7% decline following a 3.5% increase in January. Other declines included chemical products (-0.2%) and apparel (-1.3%). The gains in all other categories, including food products (+0.7%) were unable to offset the significant declines. Nondurables shipments are equivalent to orders in this report.
Factory orders excluding transportation surprised analysts even further by only rising 0.1% in the month, much lower than the 1.3% expected. This follows larger gains of 0.4% and 0.9% in January and December, respectively.
Transportation orders for February rose 7% based on Wednesday's data. All transportation categories were up, with significant increases in both nondefense (+26.2%) and defense aircraft and parts (+34.8%). Additionally, ships and boats saw a sharp bump up by 30.6% in the month, while motor vehicles rose only slightly by 1.5%. The unlisted transportation components also rose, but by a softer 1.6%.
Nondefense capital goods new orders rose by 4.3%, and even excluding aircraft it saw a rise of 1.4%. Civilian aircraft capital goods was up 30.4%. Total goods excluding defense and civilian aircraft was up 0.5%.
Overall factory shipments rose 0.2% in the month due to a 0.9% rise in durable goods shipments, offsetting a 0.5% decline in nondurables shipments. Nondefense capital goods shipments registered a rise of 1.3%, and was up slightly further to 1.4% when excluding the aircraft component.
Since factory inventories rose by 0.3% in the month, compared with the 0.2% increase in shipments, keeping the inventory-to-shipments ratio at 1.35, making this the fourth consecutive month.
