Factory Orders Regain Momentum, Led by Aircraft Demand

New orders for manufactured goods increased 0.9% in July after inching down 0.2% in June. Meanwhile, new orders for manufactured goods rose 6.5% over the year. When excluding transportation, new orders moved up 0.6% over the month and climbed 6.9% year-over-year in July. Orders for durable goods stepped up 1.1%, after rising 0.6% in June. Year to date, durable goods orders advanced 7.6%. Meanwhile, nondurable goods orders grew 5.3% over the year.

In July, the largest monthly gain occurred in nondefense aircraft and parts, which climbed 12.7% after stepping down 2.9% in June. On the other hand, the largest monthly decline occurred in construction machinery, which fell 10.4% after rising 2.1% the prior month. The largest over-the-year changes occurred in mining, oil field and gas field machinery (up 39.7%) and nondefense aircraft and parts (down 21.8%).

Factory shipments increased 0.8% in July, after staying the same in June. Shipments grew 6.9% over the year. Shipments excluding transportation stepped up 0.7% in July, after edging down 0.1% the previous month. Shipments for durable goods moved up 0.9%, following a 1.0% rise in June, and climbed 8.4% year to date. Meanwhile, nondurable goods rose 0.7%, after falling 0.9% the prior month and are up 5.3% year to date.

Unfilled orders for all manufacturing industries moved up 0.6% in July after a similar increase in June. Unfilled orders over the year jumped 8.9%. Inventories increased 0.4% month-over-month and 2.0% year-over-year. The inventories-to-shipments ratio was unchanged at 1.47 in July. The unfilled order-to-shipments ratio for durable goods moved down from 6.84 in June to 6.81 in July.