ANALYSIS: US July Factory Orders Fall 3.3%; Ex-Trans +0.5%>

--Factory Inventories +0.2%; Business Inventories Tracking +0.2%

By Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The value of new factory orders fell by 3.3% in 

July, falling slightly lower than the expected -3.1% by analysts from an 

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

were unrevised at a 6.8% decline, data released by the Commerce 

Department Tuesday morning showed. 

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

leading the increase in nondurables orders. Nondurables shipments are 

equivalent to orders in this report. 

     Total factory orders excluding transportation rose 0.5% in July, 

while durable goods orders excluding transportation were up 0.6%, 

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

     Transportation orders fell 19.2% in July based on Tuesday's data, 

down slightly from -19.0% from the advance estimate. Nondefense aircraft 

orders fell by 70.8% in July and defense aircraft orders were up 

47.8%. Motor vehicles orders fell 0.9% in July, while orders for 

ships and boats also fell by 3.1%. 

     Nondefense capital goods new orders fell 19.8%, but were up 1.0%

when a 82.2% drop in the civilian aircraft category is excluded. 

     Overall factory shipments were up 0.3% in the month due to a 0.2% 

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

shipments. Nondefense capital goods shipments rose 2.2% and were up 1.2% 

excluding the civilian aircraft component. 

     Factory inventories were up 0.2% in the month, compared with 

the 0.3% increase in shipments, shifting the inventory-to-shipments 

ratio to lower to 1.37. 

     The Commerce Department's advance report on inventories showed a 

0.4% gain for wholesale inventories and a 0.2% fall for retail 

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

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

result in a 0.2% increase in July business inventories when that report 

is released on September 15, an MNI calculation showed. The revised 

wholesale data for July will be released on September 8 and could alter 

this projection. 

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

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