| Factory Orders |
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Released On 8/31/2011 10:00:00 AM For Jul, 2011
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Prior | Consensus | Consensus Range | Actual |
| Factory Orders - M/M change | -0.8 % | 2.0 % | 0.5 % to 2.8 % | 2.4 % |
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Highlights
July was a very strong month for the manufacturing sector which got a boost from a snap-back in the auto sector which in prior months had been held down by Japanese shortages. New orders rose 2.4 percent, split between a 4.1 percent rise for durable goods (revised slightly from a previously released 4.0 percent) and a 1.0 percent rise on the non-durables side which is the new information in today's report.
New orders for motor vehicles jumped 14.8 percent in the month with shipments of autos up 4.8 percent and shipments of light trucks up 21.1 percent. July also got a big lift from civilian aircraft with new orders up 43.4 percent and with shipments up 7.9 percent. These results for vehicles and aircraft will prove tough comparisons for August's data.
Total shipments rose a very solid 1.6 percent in the month with a big 0.8 percent rise in unfilled orders another big positive. Inventories rose a moderate 0.5 percent pointing, in what is another positive, to the need for an inventory build should new orders extend their strength. These results are very positive but August is another question, given not only the tough comparison with July but also early anecdotal indications, from the run of Federal Reserve regional reports, of factory weakness in August.
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Market Consensus before announcement
Factory orders fell 0.8 percent in June reflecting a steep 1.9 percent decline in durable goods (revised from minus 2.1 percent). Orders for non-durable goods, the new data in the report, were unchanged in the month. Orders for nondefense capital goods, for defense goods and for transportation equipment were especially weak in June. But there should be a nice rebound in overall orders for July as the advance release for durables showed new orders for durable goods surged 4.0 percent in the month. Excluding transportation, new orders rose a solid 0.7 percent following 0.6 and 0.8 percent gains in the two prior months.
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Definition
Factory orders represent the dollar level of new orders for both durable and nondurable goods. This report gives more complete information than the advance durable goods report which is released one or two weeks earlier in the month.
Why Investors Care
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![[Chart]](showimage.asp?imageid=21310)
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Even though monthly shipment data fluctuate less than new orders, both series show underlying trends more clearly by looking at year-over-year changes. In 2005 for example,new orders rose more rapidly than shipments due to large gains in aircraft orders. Aircraft orders have a long lead to shipment.
Data Source: Haver Analytics
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