December 2018 Manufacturing New Orders Improve?

US Census says manufacturing new orders improved month-over-month. Our analysis shows the rolling averages declined, and the year-over-year rate of growth declined from last month.

Analyst Opinion of Census Manufacturing Sales

According to the seasonally adjusted data, there was a general weakness in most areas except civilian aircraft. The data in this series is noisy so I would rely on the unadjusted 3 month rolling averages which declined.

Remember the headline numbers are not inflation adjusted - and when inflation is factored in, there is little YoY growth.

(Click on image to enlarge)

US Census Headline:

  • The seasonally adjusted manufacturing new orders was up 0.1 % month-over-month.
  • Market expected (from Econoday) month-over-month growth of +0.1 % to +2.1 % (consensus +0.6 %).
  • Manufacturing unfilled orders was down 0.1 % month-over-month.

Econintersect Analysis:

  • Unadjusted manufacturing new orders growth decelerated 1.3 % month-over-month, and up 2.5 % year-over-year.
  • Unadjusted manufacturing new orders (but inflation adjusted) up 0.5 % year-over-year.
  • Three-month rolling new order rolling averages decelerated 1.4 % month-over-month and is up 4.8 % year-over-year.
  • Unadjusted manufacturing unfilled orders growth decelerated 0.7 % month-over-month, and up 3.8 % year-over-year [note inflation is running around 2 % in this sector which means backlog is really not growing]
  • As a comparison to the inflation-adjusted new orders data, the manufacturing subindex of the Federal Reserves Industrial Production growth decelerated 1.0 % month-over-month, and up 3.2 % 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)

(Click on image to enlarge)

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

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