Manufactured goods new orders declined in October 2010. The headlines:
New orders for manufactured goods in October, down following three consecutive monthly increases, decreased $3.6 billion or 0.9 percent to $420.1 billion, the U.S. Census Bureau reported today. This followed a 3.0 percent September increase. Excluding transportation, new orders decreased 0.2 percent.
Shipments, up three of the last four months, increased $1.5 billion or 0.3 percent to $421.0 billion. This followed a 0.7 percent September increase.
Unfilled orders, up nine of the last ten months, increased $5.2 billion or 0.6 percent to $821.6 billion. This followed a 1.3 percent September increase. The unfilled orders-to-shipments ratio was 5.76, up from 5.67 in September.
Inventories, up nine of the last ten months, increased $4.7 billion or 0.9 percent to $538.2 billion. This followed a 1.1 percent September increase. The inventories-to-shipments ratio was 1.28, up from 1.27 in September.
Econintersect uses unadjusted data which is different than the seasonally adjusted data used in the headlines.
Conclusion – it is the data adjustment and comparison methodologies used which determines whether orders are up or down. As the answer is not obvious, the safest call is that orders are flat in October 2010.
The good news is manufacturing backlog is developing an upward trend. This is telling us that capacity is matched to the economic conditions.
Overall, Econintersect does not walk away from this October data feeling that manufacturing growth is down. It appears healthy, and overall has the flavor of a slight growth bias.