The U.S. Department of Commerce reported this morning that new orders for durable manufactured goods declined in September, sliding by $2.8 billion or 1.1% to its current level of $248.2 billion.
September’s decline in durable goods follows a three-month streak of marginal gains, with a 0.3% bump recorded for August; a 2.1% increase for July; and a 1.8% gain in June.
September’s loss was led by the non-defense aircraft and parts, which tanked by 11.8%. Defense aircraft and parts increased over the month, however, up 6.3%.
Additional industries posting a loss in new orders included transportation equipment (-2.7%); motor vehicles & parts (-1.6%) and fabricated metals (-1.5%).
Gains were seen in communications equipment (1.5%); computers & related products (+1.4%) and electrical equipment (+0.9%).
Shipments Down, Led by Defense
Shipments of manufactured goods declined 0.4% in September, representing a third straight month of losses. Transportation equipment led the decrease in shipments, down 1.2% in September.
Overall manufacturers’ shipments declined $252.5 billion, a loss of 0.4%. Shipments fell the most for defense aircraft & parts (-2.9%); computers & related products (-2.6%) and machinery (-1.4%).
Some industries reported an increase in shipments, including nondefense aircraft & parts (+1.8%) and primary metals (+1.5%).
Unfilled Orders Fall, Inventories Keep Growing
The number of unfilled orders for durable manufactured goods held steady in September, down a negligible 0.1% to $161 billion, following a 0.2% increase in August.
The slight decline was led by fabricated metal products, down 0.1%. Inventories continued to grow in September, up 0.5% to a current level of $430 billion, led by transportation equipment.
Inventories have grown for fourteen of the past fifteen months, reports the Commerce Department.
Capital Goods and Defense Orders Plunge
Non-defense orders for capital goods fell sharply in September, down 2.8% to $71.6 billion. Shipments of non-defense capital goods held steady, edging down 0.1% to $74.2 billion, while unfilled orders fell $2.6 billion and inventories increased $1.8 billion.
New defense-related capital goods orders fell drastically last month, down 4.5% to $13.2 billion. On the defense end of capital goods orders, shipments rose 1.4%, as did unfilled orders, up 0.2%.
Inventories also increased, up 1% to $24 billion.
Foreign Investment Strong Despite Slowing Manufacturing Sector
September’s soft durable goods report follows the ISM’s September report on manufacturing activity, which found activity in the sector contracting for the first time in ten years.
Meanwhile, manufacturing output has all but stalled, according to the Federal Reserve, and hiring in the U.S. factory sector has decidedly slowed, with manufacturers shedding thousands of jobs in September.
Notably, however, the U.S. manufacturing sector continues to draw new investments, with IndustryNet tracking a number of new plant announcements and expansions in October. Foreign investment was particularly strong in the U.S. South.
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