The Manufacturers’ Shipments, Inventories and Orders for March 2010 was released today. This report is commonly referred to as Factory Orders in the press and refers to domestic manufactured goods.
The breakdown in change from last month:
- New orders: +1.3%
- Durable: -0.6%
- Non-Durable: +2.9%
- Shipments: +2.2%
- Unfilled orders: -0.1%
- Inventories: +0.3%
Transportation was a huge drag, down -12.6% with volatile aircraft down -66.9%. Construction machinery jumped up 28.1% and power gear (energy) new orders increased 29%. Computers increased 22% as did industrial machinery, up 25.3%. Below is a graph of just durable goods new orders:
This is one of those things where the headlines will scream the change or slope or point out that the levels are back to 2004. Wait a minute. Notice new orders are not up to pre-recession levels and these numbers are absolutes, they are not scaled to the overall growing economy.
So, while it's great to see new orders increase, there is a long way to go yet. If you want to see how important making aircraft in the United States is, look at this graph of the millions left when removing defense and aircraft, both considered volatile and not the true core of manufacturing economic growth.
Notice the scale, the difference between durable goods (which includes defense) and capital goods, excluding defense and aircraft. The point is don't let aircraft manufacturing be offshore outsourced in other words, for it really is a large part of U.S. manufacturing. Note, Boeing is already offshore outsourcing (through global sourcing) manufacturing.