March 2015 Manufacturing Presents A Mixed Picture. Rolling Averages Marginally Improve

US Census says manufacturing new orders improved. Our analysis agrees. Consider that this data is noisy – and the rolling averages (which include transport) remain in contraction territory. Unfilled orders are shrinking (year-over-year). However, since this industry is in deflation – this sector is insignificantly growing year-over-year when the data is inflation adjusted.

 

However the data is soft – and if you exclude transport (both vehicles and planes), this was a weak report.

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 up 2.7% (after last month’s downwardly revised fall of 0.1%) month-over-month, and down 4.8% year-to-date.
  • Market expected month-over-month growth of 1.4% to 3.6% (consensus +2.1%) versus the reported +2.7%.
  • Manufacturing unfilled orders up 0.1% month-over-month, and up 7.5% year-over-year.
  • Econintersect Analysis:

  • Unadjusted manufacturing new orders growth accelerated 2.7 % month-over-month, and down 3.3 % year-over-year
  • Unadjusted manufacturing new orders (but inflation adjusted) up 1.7% year-over-year – there is deflation in this sector.
  • Unadjusted manufacturing unfilled orders growth declined 0.8% month-over-month, and up 7.5% year-over-year
  • As a comparison to the inflation adjusted new orders data, the manufacturing subindex of the Federal Reserves Industrial Production was growthaccelerated 0.1% month-over-month, and up 2.7% 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)

    The graph below shows sector growth year-over-year.

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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