Factory Orders Rising

Factory orders rose +3.1% MoM in March (consensus +2.2% MoM), and February was revised higher to +1.4% MoM from +1%. Factory orders have now risen for four of the last five months, indicating that business investment may be improving, especially as orders for machinery and power generation equipment rise.

Excluding transportation, orders rose +1.9% MoM in March, indicating good aircraft demand, as seen in the durable goods orders. Durable goods orders make up about 55% of total factory demand. New orders for durable goods rose +3.7% MoM with transportation orders rising +9.5% MoM. Demand for non-durable goods rose +2.3% MoM. Ex-defense new orders rose 3.5% MoM. Defense capital goods orders have declined a huge -32% YoY.

Shipments rose for the first time in three months, increasing +1.5% MoM. Unfilled orders are at record levels, and have risen steadily for the last two years. Unfilled orders have risen 20% YoY. The unfilled-orders-to-shipments ratio also rose. The inventories-to-shipments ratio fell slightly to 1.23, from 1.25, as inventory growth slowed to only +.2% MoM.