August 2018 Manufacturing New Orders Improved

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

Analyst Opinion of Census Manufacturing Sales

According to the seasonally adjusted data, it was civilian aircraft which was the major contributor to the improvement. The data in this series is noisy so I would rely on the unadjusted 3 month rolling averages which insignificantly improved.

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

Backlog of orders continues in expansion year-over-year unless you consider inflation.

US Census Headline:

The seasonally adjusted manufacturing new orders was up 2.3 % month-over-month.

Market expected (from Econoday) month-over-month growth of 0.7 % to 3.1 % (consensus +2.0 %).

Manufacturing unfilled orders was up 0.9% month-over-month.

Econintersect Analysis:

Unadjusted manufacturing new orders growth accelerated 0.2 % month-over-month, and up 10.4 % year-over-year.

Unadjusted manufacturing new orders (but inflation adjusted) up 5.2 % year-over-year.

Three month rolling new order rolling averages accelerated 0.1 % month-over-month, and is up 8.5 % year-over-year.

Unadjusted manufacturing unfilled orders growth accelerated 1.0 % month-over-month, and up 5.0 % year-over-year [note inflation is running over 5% in this sector which means backlog is declining]

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)