Full Steam Ahead: Factory Orders Hit Record High
The U.S. Census Bureau, together with the Department of Commerce, on Monday issued its full report on durable and nondurable manufacturing for November. Following a downwardly revised contraction of 0.5 percent in October (from -0.9 percent), factory orders increased 1.8 percent on the month in November to $497.9 billion, the highest level on record for the NAICS system.
The total value of new orders placed over the past few months has returned to and exceeded pre-crisis levels, but the growth has largely been driven by new orders for transportation equipment — specifically commercial aircraft — which is subject to volatile demand. Case in point, new orders for transportation equipment increased 8.3 percent on the month in November to $81.1 billion. Although transportation equipment only accounted for about 16.3 percent of total new orders, it accounted for about 70 percent of the month-to-month growth. Excluding the segment, new orders for manufactured goods increased just 0.6 percent on the month.
But the data are still enormously encouraging, echoing a positive tone set by manufacturing purchasing managers indexes for the fourth quarter.