Manufacturing New Orders at Record Level in March 2011

The economic green shoot – manufacturing – has now exceeded the pre-recession levels.  New orders in  March 2011 are at historical high compared to March in previous years.  Growth is positive year-over-year and the rate of increase in growth (acceleration) is positive.  Manufacturing is in a robust recovery and will soon be in expansion, even on a real and population adjusted basis, if the trends of the past nine months continue. 

New orders for manufactured goods in March, up five consecutive months, increased $13.5 billion or 3.0 percent to $462.9 billion, the U.S. Census Bureau reported today. This followed a 0.7 percent February increase. Excluding transportation, new orders increased 2.6 percent.

Shipments, up seven consecutive months, increased $12.0 billion or 2.7 percent to $461.4 billion. This followed a 0.6 percent February increase.  Unfilled orders, up eleven of the last twelve months, increased $7.0 billion or 0.8 percent to $844.0 billion.  This followed a 0.7 percent February increase. The unfilled orders-to-shipments ratio was 5.54, down from 5.63 in February.

Inventories, up fourteen of the last fifteen months, increased $6.3 billion or 1.1 percent to $572.3 billion.  This followed a 1.0 percent February increase. The inventories-to-shipments ratio was 1.24, down from 1.26 in February.

One month is not a trend.  However, there has been an overall gentle improvement in YoY manufacturing growth.

The remarkable strength this month in manufacturing comes against very strong YoY growth last year YoY.  Further, order backlog (unfilled orders) continues to strengthen.

Unfilled orders have been strongly growing since the middle of 2011 confirming real growth – although the unfilled orders are not at pre-recession levels.

The trend lines in this sector of the economy are up and consistent.  The only “but” is that we are not talking about real or inflation adjusted dollars.  The transport data and industrial production data is telling us we are not yet producing at pre-recession levels.

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