MNI DATA ANALYSIS:US March Factory Orders Rise 1.6%>

--Factory Inventories +0.3%; Business Inventories Tracking +0.1%

By Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The value of new factory orders saw a 1.6% 

increase in March, up seven of the last eight months, and rising higher 

than the 1.4% gain expected by analysts in an MNI survey, data released 

by the Commerce Department Thursday morning showed. 

     Inventories were reported to have increased by 0.3% in March. In 

addition to this, the Commerce Department's advance report on 

inventories showed a 0.5% increase for wholesale inventories and a 0.4% 

decrease for retail inventories. While these data are eligible for 

revision, the levels as they stand now, combined with the 0.3% rise in 

factory inventories, would result in a 0.1% rise in March business 

inventories when that report is released on May 15, an MNI calculation 

showed. The revised wholesale data for March will be released on May 9 

and could alter this projection. 

     The larger than expected rise in factory orders is in large part 

due to durable goods rising 2.6%, unrevised from the advance estimate. 

Durable goods have been up four of the last five months. Only adding to 

the rise in durable goods orders, nondurable goods orders saw a more 

mild 0.5% rise. 

     Leading the rise in the nondurable goods category was petroleum and 

coal products with a 1.5% increase following a 3.1% decline in February. 

Softening the increase, there were declines seen in textile mills 

(-0.3%), textile products (-0.5%), printing (-0.3%), and plastics 

(-0.2%). There were muted rises for most other categories, while paper 

products were flat in the month. Nondurable shipments are equivalent to 

orders in this report. 

     Factory orders excluding transportation only rose 0.3% in the month 

This follows the soft gains of 0.2% and 0.4% in February and January, 

respectively. Despite the muted gains in factory orders excluding 

transportation, this is the tenth consecutive month of gains. 

--RISING TRANSPORTATION ORDERS 

     Transportation orders for March rose 7.6% based on Thursday's data. 

All but one of the transportation categories were down, with nondefense 

aircraft and parts being the only driver of the gain for the month, 

rising 44.5%. The unlisted transportation components rose 2.4% in the 

month. 

     Nondefense capital goods new orders rose by 5.8%, however it was 

down 0.4% when excluding aircraft. Civilian aircraft capital goods was 

up 43.6% following a 50.2% increase in February. Total goods excluding 

defense and civilian aircraft was up 0.6%. 

--INVENTORIES AND SHIPMENTS RISE

     Overall factory shipments rose 0.4% in the month due to a 0.4% rise 

in durable goods shipments and the 0.5% gain in nondurable shipments. 

Nondefense capital goods shipments saw a rise of 2.1%, however were 

down 0.8% when excluding the aircraft component. 

     Since factory inventories rose by 0.3% in the month, compared with 

the 0.4% increase in shipments, these mild gains kept the 

inventory-to-shipments ratio at 1.35, making this the fifth consecutive 

month. 

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

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