Why New Data On Durable Goods Matter… Manufacturers Place Orders When Economy Improves

When the economy shows sign of improvement, businesses and consumers are generally confident enough to start ordering durable goods — manufactured products such as cars or washing machines…

By Adriana Stoica

When the economy shows sign of improvement, businesses and consumers are generally confident enough to start ordering durable goods — manufactured products such as cars or washing machines that last three years or more.

That’s why orders for durable goods are an important leading economic indicator. A durable goods report that shows an increase in orders is a sign that the economy is trending upward.

Durable goods orders tell investors what to expect from the manufacturing sector, which is a major component of the economy.

Anyone interested in the durable goods industries will now have access to historical time series with the U.S. Census Bureau’s release of Monthly Advance Report on Manufacturers’ Shipments, Inventories and Orders.

Beginning with the July 26 release of June 2018 data, historical estimates will be available on a seasonally adjusted basis as well as not seasonally adjusted. Also, monthly data for the Advance Report will be available in the Census Bureau’s application programming interface (API).

The Manufacturers’ Shipments, Inventories and Orders (M3) Survey has been conducted monthly by the Census Bureau since 1957.

This survey provides monthly statistics for manufacturers’ value of shipments, new orders (net of cancellations), end-of-month order backlog (unfilled orders), end-of-month total inventories (at current cost or market value), and inventories by stage of fabrication (materials and supplies, work-in-process, and finished goods).

Data published from the M3 survey are based on a panel of approximately 5,000 reporting units that represent approximately 3,100 companies.

Responses are an indication of month-to-month change for the manufacturing sector. The M3 survey also provides broad and timely monthly statistical data on economic conditions in the domestic manufacturing sector.

Source: U.S. Census Bureau