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Rate of New Factory Orders Returned to Growth in September

Nov. 3, 2020
Latest data from the Commerce Department shows new orders for manufactured goods have risen for five consecutive months.

According to latest information from the U.S. Census Bureau, orders of manufactured goods climbed by $5.2 billion to $475 billion in September, an increase of 1.1% following August’s tepid 0.6% growth.

Shipments of goods rose 0.3% to $482.8 billion, matching August’s 0.3% shipment growth. Unfilled orders, which decreased 0.6% in August, fell 0.2% in September to $1,075.9 billion and the ratio of unfilled orders fell slightly. Inventories increased very slightly, by $0.2 billion of $686.7 billion.

New orders of durable goods specifically increased by 1.9%, an improvement compared to its 0.4% increase in August. The durable goods segment was driven by substantial amounts of new orders for transportation equipment, which saw 4.1% more new orders in September.

Primary metals manufacturers were split: the sector saw a 4.0% improvement overall between iron and steel mills, which recorded 8.7% more orders, and ferrous metal foundries, which saw orders fall 6.5%. (Aluminum and nonferrous metals orders were mostly unchanged at -0.1%.)

New orders for machinery fell 0.3%, orders for computers and electronic products grew 0.6%, electrical appliance and equipment orders fell 0.7%, and orders for furniture fell 1%.

New orders for nondurable goods increased by 0.3%.

The solid growth figures are an improvement from August’s numbers, during which the number of new orders was “virtually unchanged” from July, according to the Commerce Department.

New orders sank about 11% in March and 13.5% in April as factories shut down production to protect employees from COVID-19.

In the three months that followed, the rate of new orders grew significantly: 7.7% in May, 6.4% in June, and 6.5% in July before recovery shrank to less-than-1% growth in August.

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