Resilient U.S. Manufacturing Sector Sees Growth in New Orders, Shipments, and Inventories

Published / Modified Jun 04 2024
Source: U.S. Census Bureau, CSIMarket Team / CSIMarket.com

Manufacturers' Shipments, Inventories, and Orders: New Orders Increase in April

The U.S. manufacturing sector continues to show signs of recovery as new orders for manufactured goods increased by 0.7 percent in April, marking the third consecutive month of growth.
According to the economic report released by the U.S. Commerce Department, new orders rose by $4.3 billion to reach $588.2 billion, indicating positive momentum in the industry.

Notably, the durable goods segment played a significant role in this growth, with shipments increasing by 1.18 percent to $286 billion.
Orders for U.S.-made products designed to last at least three years also experienced a modest uptick of 0.23 percent to $284 billion, resulting in a $1 billion increase from March.
This increase was attributed to strong demand for heavy machinery, passenger jets, and communications equipment, indicating an overall positive outlook for the manufacturing industry.

The report brings encouraging news for the manufacturing sector, as it confirms the sustained recovery in manufacturing activity.
Over the past year, however, U.S.-made products designed to last three years or more, including automobiles and appliances, have experienced a decline of 0.65 percent.
Despite this decrease, inventories grew by 1.19 percent, reflecting a cautious approach by manufacturers who are gearing up to meet future demands.

Another noteworthy observation is the increase in unfilled orders, although at a smaller rate compared to the previous month.
Unfilled bookings grew by 0.28 percent on a seasonally adjusted basis, driven by a significant 1.01 percent increase in primary metals unfilled orders.
This category accounted for 2.78 percent of total durable goods unfilled orders.
Over the past 12 months, unfilled orders have grown by an impressive 5.17 percent, indicating a positive backlog of orders.

Economists closely monitor a category of orders known as core capital goods, which excludes defense and transportation, to gauge long-term trends in the private sector.
In April, core capital goods orders grew by 0.26 percent on a seasonally adjusted basis, reaffirming the positive trajectory of the manufacturing sector.
Inventories in this category also experienced a growth of 0.26 percent.

The Commerce Department also announced an increase in total durable goods inventories by 0.11 percent to $528 billion.
Aircraft and parts inventories saw a significant rise of 1.12 percent to $83 billion.
The inventory to shipments ratio fell slightly to 1.85 from the previous month's 1.87, suggesting a better alignment between supply and demand.

Shipments of U.S.-made products designed to last three years or more, such as automobiles or appliances, showed a notable increase of 1.18 percent in April on a seasonally adjusted basis, reaching $286 billion.
However, when excluding transportation shipments, there was a slight decline of -0.10 percent.

In summary, the economic report on manufacturers' shipments, inventories, and orders reveals a positive trend in the U.S. manufacturing sector.
Despite a slight decrease in some segments and products, the overall growth in new orders, durable goods shipments, and unfilled orders indicate a steady recovery from the challenges faced by the industry.
As the global economy stabilizes and demand increases, manufacturers are cautiously expanding their inventories to meet future demands, laying a strong foundation for continued growth in the sector.


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