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Good economic news out today in the manufacturing, service and housing sectors as the Commerce Department reports an increase in factory orders, the Institute for Supply Management reports an increase in nonmanufacturing business activity and the Mortgage Bankers Association reports increased purchase mortgage applications.

New orders for manufactured goods in March rose 4.2%, to $419.6 billion, according to data released by the Commerce Department Wednesday. Shipments increased 0.8%, to $408 billion. Unfilled orders rose 2.9%, to $662.6 billion. And inventories increased 0.7%, to $477.1 billion. Inventory rising by less than orders is an expansionary indicator and the increase in unfilled orders could be an inflationary indicator.

Business activity in the non-manufacturing sector increased in April 2006, according to the Non-manufacturing Report On Business from the Institute for Supply Management (formerly the National Association of Purchasing Managers). ISM Non-Manufacturing Business Survey Committee Chair Ralph G. Kauffman, Ph.D., C.P.M. said that «Non-manufacturing business activity increased for the 37th consecutive month in April. Fourteen of 17 non-manufacturing industry sectors report increased activity in April, compared to 13 that reported increased activity in March. Members' comments in April are mostly positive concerning current business conditions, with a number of them indicating that this month's faster rate of increase of inventories is due to increased business or the expectation of increased business activity. Price increases have again become a significant area of concern for many members as a result of recent fuel price increases. The Prices Index jumped 10 points this month to 70.5 percent, a level not seen since November 2005 when the index was 70.8 percent. The overall indication in April is continued economic growth in the non-manufacturing sector.»

The Mortgage Bankers Association Weekly Mortgage Survey showed a better than 11 percent increase in new purchase mortgage applications.

nom-manufacturing business,Factory Orders,ISM,housing market

HIGHLIGHTS FROM THE PRELIMINARY REPORT ON MANUFACTURERS' SHIPMENTS, INVENTORIES, AND ORDERS

Summary

New orders for manufactured goods in March, up five of the last six months, increased $17.0 billion or 4.2 percent to $419.6 billion, the U.S. Census Bureau reported today. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.4 percent February increase. Shipments, up five of the last six months, increased $3.4 billion or 0.8 percent to $408.0 billion. This followed a 1.2 percent February decrease. Unfilled orders, up ten of the last eleven months, increased $18.9 billion or 2.9 percent to $662.6 billion. This was at the highest level since the series began and followed a 1.1 percent February increase. The unfilled orders-to-shipments ratio was 4.39, up from 4.30 in February. Inventories, up six of the last seven months, increased $3.5 billion or 0.7 percent to $477.1 billion. This followed a 0.4 percent February decrease. The inventories-to-shipments ratio was 1.17, unchanged from February.
New Orders

New orders for manufactured durable goods in March, up five of the last six months, increased $14.2 billion or 6.5 percent to $231.8 billion, revised from the previously published 6.1 percent increase. This was at the highest level since the series began and followed a 3.5 percent February increase.

New orders for manufactured nondurable goods increased $2.8 billion or 1.5 percent to $187.8 billion.
Shipments

Shipments of manufactured durable goods in March, up five of the last six months, increased $0.6 billion or 0.3 percent to $220.3 billion, unchanged from the previously published increase. This followed a 0.6 percent February increase.

Shipments of manufactured nondurable goods, up five of the last six months, increased $2.8 billion or 1.5 percent to $187.8 billion. This increase was led by petroleum and coal products, which increased $2.4 billion or 7.1 percent to $36.1 billion.
Unfilled Orders

Unfilled orders for manufactured durable goods in March, up ten of the last eleven months, increased $18.9 billion or 2.9 percent to $662.6 billion, revised from the previously published 2.8 percent increase. This was at the highest level since the series began and followed a 1.1 percent February increase.
Inventories

Inventories of manufactured durable goods in March, up six of the last seven months, increased $2.6 billion or 0.9 percent to $290.1 billion, revised from the previously published 0.7 percent increase. This followed a 0.4 percent February decrease.

Inventories of manufactured nondurable goods, up three of the last four months, increased $0.8 billion or 0.4 percent to $187.1 billion. This increase was led by chemical products, which increased $0.6 billion or 1.1 percent to $56.9 billion.

By stage of fabrication, March materials and supplies increased 1.2 percent in durable goods and 0.2 percent in nondurable goods. Work in process increased 1.3 percent in durable goods and decreased 0.1 percent in nondurable goods. Finished goods increased 0.2 percent in durable goods and 0.7 percent in nondurable goods.

Released May 3, 2006. Note: All figures in text are in seasonally adjusted current dollars. The advance report on durable goods for April is scheduled for May 24, 2006 at 8:30 a.m. and the full report on June 2, 2006 at 10:00 a.m. For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

April 2006 Non-Manufacturing ISM Report On Business
Business Activity at 63%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of April 2006.
New Orders Index at 64.6%
Employment Index at 56.5%

(Tempe, Arizona) ※ Business activity in the non-manufacturing sector increased in April 2006, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Ralph G. Kauffman, Ph.D., C.P.M., chair of the Institute for Supply Managementâ„¢ Non-Manufacturing Business Survey Committee; and coordinator of the Supply Chain Management Program, University of Houston-Downtown. «Non-manufacturing business activity increased for the 37th consecutive month in April,» Kauffman said. He added, «Business Activity and New Orders increased at faster rates in April than in March. Prices, Inventories, Backlog of Orders and Employment also increased at faster rates. New Export Orders and Imports increased at slower rates than in March. Fourteen of 17 non-manufacturing industry sectors report increased activity in April, compared to 13 that reported increased activity in March. Members' comments in April are mostly positive concerning current business conditions, with a number of them indicating that this month's faster rate of increase of inventories is due to increased business or the expectation of increased business activity. Price increases have again become a significant area of concern for many members as a result of recent fuel price increases. The Prices Index jumped 10 points this month to 70.5 percent, a level not seen since November 2005 when the index was 70.8 percent. The overall indication in April is continued economic growth in the non-manufacturing sector.»
TOP PERFORMING INDUSTRIES

The 14 industries reporting growth in April ※ listed in order ※ are: Real Estate; Entertainment; Mining; Other Services*; Utilities; Construction; Retail Trade; Public Administration; Finance & Banking; Communication; Health Services; Wholesale Trade; Business Services; and Insurance. The two industries reporting activity the same as last month are: Agriculture and Legal Services. The one industry reporting decreased activity from March to April is Transportation.
WHAT RESPONDENTS ARE SAYING ...

* «Raw materials continue to escalate in cost, driving the raw materials costs to our suppliers up and in turn our costs.» (Communication)
* «High energy costs could affect savings rates and balances.» (Finance & Banking)
* «Business activity is good and growing.» (Insurance)
* «Demand for coal remains high. Our sales of mine supplies is at the highest level.» (Mining)
* «Conditions are less than rosy as material costs continue to be impacted by fuel and transportation costs. Rising mineral costs and diminishing supply are also rippling through.» (Retail Trade)
* «Continued business growth slowed by material delays.» (Utilities)

Complete report with data tables [in popup window]