Orders For Manufactured Goods Up, Shipments Still Down

New manufacturing orders went up in August but shipments did not keep pace, according to a U.S. Census Bureau report released Monday.

New orders for manufactured durable goods in August increased $4.6 billion, or 1.8%, to $263.5 billion, continuing a trend of increased production in 15 of the last 16 months. The new data represents a 0.5% increase from July.

When taking into account defense goods, new orders were up 2.4%. But the main driver of the new orders was in transportation equipment and capital goods, which led the increase by $4.2 billion.

While manufacturing rose, shipments of these durable goods went in the opposite direction and decreased in August after three months of consecutive increases.

The amount of goods shipped fell $1.2 billion to $256.1 billion, a decrease of 0.5%. Just as transportation equipment was the driver of new orders in the recent report, it also drove the decrease of durable goods shipments with a $2 billion fall to $73.5 billion.

July’s durable goods report also saw a revision to reflect a 0.5% increase in the total orders placed. It was previously reported that July's total number of new orders were down 1.2% and the decreases were focused in the transportation sector. August's numbers signal that this sector has rebounded somewhat though it remains saddled by unmet shipments of finished durable goods.

However, these trends continue a pattern of high demand and a gap in supply that has been unable to meet it. The COVID-19 pandemic has exasperated this situation by squeezing global supply chains and creating persistent labor shortages across sectors that leave manufacturing costs higher.