August Factory Orders Higher | AccountingWEB

August Factory Orders Higher

New orders for manufactured goods rose 2.5 percent in August offsetting a 2.5 percent decrease in July. These numbers may show that the economy is robust even with higher energy prices according to Reuters. Two hurricanes’ worth of damage to the Gulf Coast had not occurred when these numbers were compiled.

Manufactured durable goods orders increased 3.4 percent to $210.6 billion while manufactured nondurable goods orders increased 1.6 percent to $184.7 billion according to the U.S. Census Bureau. The durable goods figure was supported by a 5.5 percent surge in orders for computer and other electronic products. This durable goods figure was previously published at 3.3 percent. Durable goods are items that are expected to last for three years or more.

As reported by the U.S. Census Bureau, shipments of manufactured durable goods orders increased 1.8 percent to $208.8 billion. This figure has been up for three of the previous four months. Shipments of manufactured nondurable goods orders increased 1.6 percent to $184.7 billion. This is the highest figure in the history of this series of figures.

Unfilled orders for manufactured durable goods have been moving up for the previous four months according to the U.S. Census Bureau. In August, they increased 1.6 percent to $590.0 billion. This number was previously published at 1.7 percent.

The U.S. Census Bureau reports that inventories of manufactured durable goods were down by 0.3 percent to $282.1 billion as they have been for two of the previous three months. This figure was previously published at 0.2 percent. Up for seven of the previous eight months, inventories of manufactured nondurable goods rose 0.1 percent to $181.6 billion.

The inventory-to-sales ratio decreased to 1.18 months according to Reuters. This is the lowest figure since December 2004. This figure is down from its 1.20 month level in July.

Any manufacturing impacts as a result of Hurricanes Katrina and Rita should be small as the manufacturing in the affected Gulf area accounts for 1.85 percent of all U.S. manufacturing according to Reuters. Unemployment estimates up to 400,000 and any negative movement in consumer confidence in the wake of continued high energy prices may have a greater effect on the economy according to the Associated Press.

With the August recovery, positive September figures might settle many fears in our consumer confidence. The advanced report on durable goods for September will be available on October 27th and the full report on November 3, 2005.

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