September 2015 Manufacturing Remains Bad

US Census says manufacturing new orders declined. Our analysis says sales were not good. Unadjusted unfilled orders’ growth remains in CONTRACTION year-over-year.

Part of the reason for the bad data is that the data is not inflation adjusted (deflation is occuring in this sector) – but it does not explain all the decline. Most of the data was soft, but civilian aircraft was the major headwind.

3 Month Rolling Average – Unadjusted Manufacturing New Orders (blue line), Inflation Adjusted New Orders from the Unadjusted Data (red line)

US Census Headline:

The seasonally adjusted manufacturing new orders is down 1.0 % month-over-month, and down 7.2 % year-to-date (last month was down 7.2 % year-to-date)..

Market expected month-over-month growth of -2.0 % to 0.0 % (consensus -0.9 %) versus the reported -1.0 %.

Manufacturing unfilled orders down 0.5 % month-over-month, and down 2.2 % year-over-year.

Econintersect Analysis:

Unadjusted manufacturing new orders growth decelerated 0.3 % month-over-month, and down 7.1 % year-over-year

Unadjusted manufacturing new orders (but inflation adjusted) down 0.6 % year-over-year – there is deflation in this sector.

Unadjusted manufacturing unfilled orders growth decelerated 0.9 % month-over-month, and down 2.2 % year-over-year

As a comparison to the inflation adjusted new orders data, the manufacturing subindex of the Federal Reserves Industrial Production was growthdecelerated 0.1 % month-over-month, and up 1.6% 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)