September 2018 Manufacturing New Orders Improved

US Census says manufacturing new orders improved. Our analysis shows the rolling averages improved.

Analyst Opinion of Census Manufacturing Sales

According to the seasonally adjusted data, it was military aircraft which was the major contributor to the improvement (and civilian aircraft made a negative contribution). The data in this series is noisy so I would rely on the unadjusted 3 month rolling averages which improved.

Remember the headline numbers are not inflation adjusted – and inflation is a big deal in this sector.

Backlog of orders remains barely in expansion year-over-year considering inflation.

US Census Headline:

The seasonally adjusted manufacturing new orders was up 0.7 % month-over-month.

Market expected (from Econoday) month-over-month growth of -0.5 % to 0.6 % (consensus +0.4 %).

Manufacturing unfilled orders was up 0.8 % month-over-month.

Econintersect Analysis:

Unadjusted manufacturing new orders growth decelerated 3.7 % month-over-month, and up 6.9 % year-over-year.

Unadjusted manufacturing new orders (but inflation adjusted) up 2.2 % year-over-year.

Three-month rolling new order rolling averages accelerated 0.6 % month-over-month and is up 9.2 % year-over-year.

Unadjusted manufacturing unfilled orders growth accelerated 0.1 % month-over-month, and up 5.1 % year-over-year [note inflation is running nearly 5 % in this sector which means backlog is really not growing]

As a comparison to the inflation-adjusted new orders data, the manufacturing subindex of the Federal Reserves Industrial Production growth up 0.3 % month-over-month, and up 3.4 % year-over-year.

Seasonally Adjusted Manufacturing Value of New Orders – All (red line, left axis), All except Defense (green line, left axis), All with Unfilled Orders (orange line, left axis), and all except transport (blue line, right axis)