The US Census Bureau reported that new orders for manufactured goods increased $4.8 billion (B), or 1.0% to $476.5 B in February. This was the seventh increase in the past eight months and follows a 1.5% increase in January. Shipments increased by $1.4 B or 0.3% to $480.0 B and have risen in 11 of the last 12 months.
Manufactured durable goods in February rose by $4.2 billion (B), or 1.8% to $236.0 B. This was the second consecutive monthly increase. A $3.4 B or 4.4% increase to $80.5 B for transportation goods orders was a significant contributor. New orders for manufactured nondurable goods increased $0.6 B or 0.2% to $240.5 billion. Manufactured goods inventories increased by $0.8 B of 0.2% in February, up in three of the previous four months, totaling $385.2 B. Primary metal inventories have increased in each of the past four months and was responsible for $0.2 B or 0.7%, reaching a total of $32.0 B. Non-durable manufactured goods were up $0.3 B or 0.1% to $244.8 B and have been higher in six of the last 7 months. Inventories of coal and petroleum products moved higher and were also up in six of the past seven months, +$0.5 B or 1.6% totaling $30.9 B.
Figure 1 shows a chart of total manufactured inventories in millions of seasonally and inflation adjusted dollars (blue line, left-hand Y axis) and the inventory to shipment ratio (red line, right-hand Y axis). Inventories were trending higher in 2015 and 2016 but have begun reversed direction in 2017, as has the inventory to shipment (I/S) ratio. The I/S ratio was 1.31 in February 2017 down from 1.37 year on year.
According to Census Bureau data for Series 31A, Iron and Steel Mills and Ferroalloy and Steel Product Manufacturing Inventories stood at $16,547 M in February. This figure decreased by 0.8% month on month and was down 14.3% year on year, (Figure 2).
At Gerdau we monitor the US Census Bureau Inventory Census data to provide insight into the health of the manufacturing sector with emphasis on the steel sub-component.