Factory orders in February continued their upward trend, in part driven by shipments of chemical products, according to a U.S. Commerce Department survey released Wednesday.
New orders rose 0.6% to $383.5 billion, marking that statistic's eleventh consecutive month of gains. Durable goods orders bumped up 0.9% to $178.5 billion in February, marking three consecutive months of increases, while nondurable goods rose 0.3% to $205.1 billion.
"Factory orders were better than we expected," said Marisa Di Natale, director of Moody's Economy.com.
Previously Di Natale was expecting a decrease, she said: An increase of 0.3% in shipped manufactured nondurable goods contributed to the surprise jump. Di Natale cited the strong performance of chemical products, which increased 1.5% to $54 billion, as a major contributor to the increase. Overall shipments, however, were down for five consecutive months to $384.9 billion when including durable goods.
Unfilled orders, meanwhile, increased 0.5% to $772.2 billion during the month of February, with transportation equipment backlogs posting the largest increase of 0.5% to $413.3 billion.
Inventories, which rose by a similar 0.5% margin to $498.3 billion, were aided by increases in petroleum and coal products for nondurable goods and primary metals for durable goods. This comes as some producers are adding to their inventories rather than drawing down their supplies, Di Natale noted.
Although factory orders are showing a slight uptick, February performance was far from strong, Di Natale said, adding that the factory orders report is one of the more volatile economic indicators.
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