New orders for all factory goods were flat in February from January, while the dollar value of orders was revised lower for January to down 0.5% (previously down 0.3%). New orders for nondurables were down 1.2% on widespread softness that included a 6.1% drop for petroleum refineries with lower prices for crude oil. Durables orders were up 1.2%, mainly on the transportation component which rose 4.6%. However, that rise was concentrated in ships and boats which gained 124.7%, probably related to defense orders. Orders for motor vehicles were down 0.1%, nondefense aircraft was off 13.3% and defense aircraft fell 13.3%.
“Core” durable orders — orders excluding civilian aircraft and defense capital goods — were down 0.5% in February and 0.3% in January. The underlying trend for orders for hard goods is weak and not likely to improve any time soon. The COVID-19 pandemic is playing havoc with orders and supply chains as consumers and businesses are mired in uncertainty.
Unfilled orders were restrained by weakness in aircraft and were up a bare 0.1%. The value of shipments fell 0.2% in part on the softness in nondurables prices, although durables orders were moved out quickly. Inventories were down 0.4% as businesses were both unable to restock and unwilling to do so in the face of rising questions about the outlook.
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