In March, US factory orders jumped by 3.0% M/M, beating market expectations (2.0% M/M), while also the previous figure was upwardly adjusted (from -0.1% M/M to 0.7% M/M). Excluding the volatile transportation component, factory orders are up by a strong 2.6% M/M.
The details show that strength was broad-based as both durable goods orders (2.9% M/M) and shipments of nondurables (3.1% M/M) rose significantly in March, led by gains in petroleum and chemicals. Shipments rose by 2.7% M/M and inventories increased by 1.1% M/M. As a result, the inventory/shipments ratio fell from 1.26 to 1.24. Factory orders have now risen for five consecutive months, signalling that the US manufacturing sector continues to grow at a healthy pace as was already signalled by the business confidence indicators.