Haver Resources
Jan 06

U.S. Factory Orders Decline in November, the Third M/M Decrease in Four Months

Summary
  • Manufacturers’ new orders -0.4% (-1.9% y/y) in Nov. vs. +0.5% (+2.1% y/y) in Oct.
  • Durable goods orders (-1.2%) fall m/m, while nondurable goods orders (+0.4%) and shipments (+0.1%) increase m/m.
  • Unfilled orders rise 0.3%, the fifth straight m/m increase.
  • Inventories rebound 0.3%, the first m/m rise since August.

Total factory orders fell an expected 0.4% m/m (-1.9% y/y) in November after a 0.5% increase in October and a 0.2% decline in September, data from the U.S. Census Bureau showed. A 0.4% m/m November decrease had been expected in the Action Economics Forecast Survey. The November reading was the third m/m fall in four months. Notably, orders for nondefense aircraft & parts dropped 7.0% in November following a 16.4% rebound in October. Factory orders excluding defense were virtually unchanged (-2.3% y/y) after a 0.5% October rise. Factory orders excluding the transportation sector grew 0.2% (1.4% y/y), the fifth m/m gain in six months, on top of a 0.2% October increase.

Durable goods orders slid 1.2% (-5.3% y/y) in November, down for the third month in four, reversing a 0.7% rise in October (in line with a 1.1% m/m decline for Nov. in the advance report on Dec. 23). The November slide reflected m/m orders drops of 3.0% (-16.2% y/y) in transportation equipment, 1.7% (+1.5% y/y) in fabricated metal products, and 0.5% (+1.7% y/y) in computers & electronic products. To the upside, the following durable goods orders rose m/m in November: primary metals (0.8%; 2.0% y/y), electrical equipment, appliances & components (0.4%; 4.1% y/y), and machinery (0.4%; 1.0% y/y). Meanwhile, durable goods orders for furniture & related products were essentially unchanged (-0.7% y/y) in November after a 1.0% decline in October.

Nondurable goods orders, which equal nondurable goods shipments, rose 0.4% (1.5% y/y) in November following a 0.2% increase in October and two consecutive m/m declines. The November rise reflected m/m increases of 1.1% (-6.1% y/y) in petroleum & coal products, 0.9% (6.0% y/y) in chemical products, 0.6% (2.0% y/y) in paper products, 0.5% (0.8% y/y) in textile mills, 0.4% (3.2% y/y) in leather & allied products, and 0.1% (1.8% y/y) in food products. To the downside, the following nondurable goods shipments fell m/m in November: apparel (-2.4%; -2.4% y/y), beverage & tobacco products (-1.6%; +9.6% y/y), textile products (-0.9%; -0.2% y/y), and plastics & rubber products (-0.2%; -0.3% y/y). Meanwhile, nondurable goods shipments for printing held steady (3.8% y/y) in November following two successive m/m decreases.

Total shipments increased a marginal 0.1% (1.2% y/y) in November, the first m/m rise since July, following a 0.2% decline in October. Excluding transportation, shipments rose 0.4% (1.2% y/y), the fourth m/m rise in five months, after a 0.2% October increase. Shipments of durable goods industries fell 0.2% (+1.0% y/y) in November, the fourth consecutive m/m fall, after a 0.5% decline in October. This reflected m/m durable goods shipments drops of 1.2% (-1.0% y/y) in nonmetallic mineral products, 1.1% (+1.1% y/y) in transportation equipment, and 0.4% (-0.6% y/y) in machinery. In contrast, the following durable goods shipments rose m/m in November: primary metals (1.5%; 2.3% y/y), wood products (0.6%; -0.6% y/y), computers & electronic products (0.5%; 1.3% y/y), fabricated metal products (0.4%; 0.9% y/y), furniture & related products (0.3%; 0.8% y/y), electrical equipment, appliances & components (0.1%; 2.3% y/y), and miscellaneous durable goods (0.1%; 2.6% y/y).

Unfilled orders rose 0.3% (2.0% y/y) in November, the fifth consecutive m/m rise, on top of a 0.5% increase in October. Excluding transportation, unfilled orders were unchanged (+0.2% y/y) in November after rising 0.2% in the prior three months. Backlogs of durable goods also rose 0.3% (2.0% y/y) in November, led by rises of 0.5% (3.0% y/y) in transportation equipment and 0.4% (1.0% y/y) in electrical equipment, appliances & components.

Inventories recovered 0.3% (0.4% y/y) in November, the first m/m increase in three months, following a 0.1% easing in October. Excluding transportation, inventories inched up 0.1% (-0.4% y/y) in November after holding steady in October. Durable goods inventories rose 0.4% (1.1% y/y) in November after no change in the previous month; nondurable goods inventories rebounded 0.2% (-0.6% y/y), the first m/m increase since August.

The factory sector data are available in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.

About The Author

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Winnie Tapasanun

Haver Analytics is pleased to bring Winnie Tapasanun’s commentaries on the state of the U.S. economy to its clients. Winnie Tapasanun has been working for Haver Analytics since 2013. She has almost 20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations.

Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia.

Winnie is bilingual in English and Thai with competency in French. She loves to travel (almost 30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.

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