ANALYSIS: US August Factory Orders Rise 1.2%; Ex-Trans +0.4%>

--Factory Inventories +0.4%; Business Inventories Tracking +0.7%

By Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The value of new factory orders rose by 1.2% in 

August, rising slightly higher than the expected +0.9% by analysts from 

an MNI survey. Nondurable goods orders rose 0.4%, but durable goods 

orders were revised up to a 2.0% increase, data released by the Commerce 

Department Thursday morning showed. 

     Petroleum and coal products shipments rose by 2.2% in August, 

leading the increase in nondurables orders. Nondurables shipments are 

equivalent to orders in this report. 

     Total factory orders excluding transportation rose 0.4% in 

August, while durable goods orders excluding transportation were up

0.5%, revised up from the 0.2% increase in the advance estimate. 

     The August transportation orders saw a rise of 5.1% based on 

Thursday's data, up slightly from the 4.9% from the advance 

estimate from the durables report released September 27. Nondefense 

aircraft orders rose by 44.8% in August and defense aircraft orders 

were down 24.3%. Motor vehicles orders rose 0.7% in August, while 

orders for ships and boats fell by 2.3%. 

     Nondefense capital goods new orders rose by 4.9%, but were up only 

1.1% when a 72.3% increase in the civilian aircraft capital goods 

category is excluded. 

     Overall factory shipments were up 0.5% in the month due to a 0.5% 

rise in durable goods shipments and a 0.4% increase in nondurables 

shipments. Shipments for nondefense capital goods fell 1.1% and were up 

1.1% excluding aircraft component. 

     Factory inventories were up 0.4% in the month, compared with the 

0.5% increase in shipments, making the inventory-to-shipments ratio to 

remain at 1.38. 

     The Commerce Department's advance report on inventories showed a 

1.0% gain for wholesale inventories and a 0.7% gain for retail 

inventories. While these data are eligible for revision, the levels as 

they stand now, combined with Thursday's factory inventory data, would 

result in a 0.7% increase in August business inventories when that 

report is released on October 13, an MNI calculation showed. The revised 

wholesale data for August will be released on October 6 and could alter 

this projection. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$]