U.S. Department of Commerc
BUREAU OF THE CENSUS "
CURRENT INDUSTRIAL REPORTS
Inventories, and Orders
For Wire Transmission 3:00 P.M. Friday, January 2, 1981
(All figures in text below are in seasonally adjusted current dollars.)
New orders for manufactured goods in November increased
$1.6 billion or 1.0 percent from October to $159.6 billion, the
Department of Commerce, Bureau of the Census, reported
today. New orders for durable goods in November increased
$1.1 billion or 1.3 percent to $81.8 million. Although this is
the third consecutive monthly increase in orders for durable
goods, the rates of increase have declined from 9.3 percent in
September and 2.2 percent in October.
Within the durable goods industries, new orders for trans-
portation equipment were $1.2 billion or 8.2 percent to $16.2
billion, following a 14.2 percent decline in October. Most of the
November increase came from the aircraft and parts industry.
Excluding the transportation equipment category, new orders
for durable goods declined a 0.3 percent.
New orders for both electrical and nonelectrical machinery
were up in November. Orders for electrical machinery, increased
$0.4 billion or 3.2% to $11.4 billion; orders for nonelectrical
machinery were valued at $15.0 billion, a $0.2 billion or 1.1
percent increase over October.
The only significant declines in durable goods orders occurred
in the primary metals industries. Steel orders were down $0.2
billion or 2.3 percent to $7.0 million, following five consecutive
monthly increases of 10 percent or more. New orders for non-
ferrous metals were down $0.5 billion or 8.4 percent to $5.0
Within the capital goods industries, new orders for nondefense
capital goods increased $1.4 oillion or 6.6 percent to $22.0
billion. New orders for defense capital goods went up $0.6
billion or 15 1 percent to $4.5 billion, with all categories except
communication equipment increasing.
Shipments of manufactured products in November were
valued at $158.4 billion, up $1.7 billion or 1.1 percent over
October. Shipments of durable goods showed a similar per-
centage increase, going up $0.8 billion or 1.0 percent to $80.3
billion. All major durable goods industries except transportation
equipment had increases, the largest coming in the primary
metals category where steel shipments went up $0.5 hilli-. or
8.7 percent to $6.3 billion. The decline in transportation equip-
ment shipments was caused by the motor vehicle industry where
deliveries were down $0.1 billion or 1.0 percent to $9.8 billion.
Shipments of nondurable goods in November were up $0.9
billion or 1.2 percent from October to $78.1 billion. The largest
increases were in the petroleum industry, up $0.5 billion or 3.2
percent to S15 5 billion, and the food industry, up $0.2 billion
or 1.1 percent to $22.1 billion.
The backlog of manufacturers' orders at the end of November
was valued at $288.1 billion, a $1.2 billion or 0.4 percent increase
over October. The value of unfilled orders for steel was up
$0.7 billion or 4.1 percent to $18.9 billion, for electrical
machinery $0.6 billion or 1.7 percent to $39.5 billion, and for
nonelectrical machinery $0.2 billion or 0.4 percent to $56.8
billion. The backlog of orders for nonelectrical machinery is
substantially lower than the peak level of $60.1 billion reported
in January of this year.
Manufacturers reported a book value of inventories in
November of $244.2 billion, up $1.3 billion or 0.5 percent from
October. The foods products industry reported the largest
increase, going up $0.4 billion or 1.7 percent to $21.9 billion,
while the petroleum industry had the largest decline, down
$0.2 billion or 1.9 percent to $8.3 billion. The inventory to
shipments ratio for November was 1.54, down from last
month's ratio of 1.55.
The figures on the durable goods industries in this report
supersede those issued earlier in the advance report on durable
goods. The present report is based on more complete reporting,
but the estimates are also considered preliminary. Final figures
will appear as historical data in the report to be published for
next month. The advance report on durable goods for December
is schedueld for release on January 23, 1981 and the full report
is scheduled for release on February 3, 1981.
Address inquiries concerning these figures to U.S. Department of Commerce, Bureau of the Census, Industry Division, Washington, D.C. 20233, or call
Ruth Runyan or Kathleen Swindell. (301) 763-2502.
For sale by Customer Services (DUSD) Bureau of the Census, Washington, D.C. 20233, or any U.S. Department of Commerce district office. Postage
stamps not acceptable; currency submitted at sender's risk. Remittances from foreign countries must be by international money order or by a draft on a
U.S. bank. Price, 30 cents per copy, $3.60 per year.
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Table 6. MANLFACTRIIRS' SHIPMENTI, INVENTORIES, AND ORDERS--MONTII-TO-MONTH AND IONG-TERM PEIrENT CHANGES
(Based on seasonally adjusted data)
Month-to-month Average monthly rates of change Average,
3 months 12 months
Item and industry group Oct.- Sept.- Aug.-
Nov. Oct. Sept. Aug.- May- Feb.- 1 Averie decline
1980P 1980 1980 Nov. Aug. May Nov. 1979- ise de i80t
1980 1980 1980
All manufacturing industries.................. +1.1 +2.b +4.2 +2.6 +1.2 -2.5 +0.8 +1.6 -1.2
Durable goods industries..................... 1.0 +3.8 +6.3 +3.7 +1.2 -4.3 +0.7 +1.9 -1.9
Nondurable goods industries................. +1.2 +1.3 +2.2 +l.b +1.2 -0.8 +0.9 +1.b -0.7
All manufacturing industries.................. +0.5 -0.3 +0.0 +0.1 +0.0 +1.2 +0.6 +0.7 -0.3
All manufacturing industries.................. +1.0 +1.8 +5.5 +2.7 +1.9 -3.5 +0.7 +1.9 -1.2
Durable goods industries...................... -1.3 +2.2 +9.3 +4.2 +2.4 -6.0 +0.6 +2.8 -2.0
Nondurable goods industries................. +0.7 +1.4 +1.8 +1.3 +1.5 -0.9 +0.8 +1.5 -0.7
Durable goods industries...................... +0.5 +0.4 +0.9 +0.6 -0.1 -0.0 +0.4 +1.2 -0.9
Table 7. RATIO OF MANIWACTURERS' INVENTORIES TO SHIPMENTS AND UNFILLED ORDERS TO SHIPMENTS, BY INDUSTRY GROUP
(Based on seasonally adjusted data)
Inventories--shipments ratio Unfilled orders--shipments ratio
November October September August November October September August
1980 1980 1980 1980 1980 1980 1980 1980
All manufacturing industries........................... 1.54 1.55 1.60 1.66 3.49 3.51 3.56 3.76
Durable goods industries..................................... 2.00 2.01 2.10 2.24 4.15 4.18 4.26 4.52
Stone, clay, and glass products............................. 1.39 1.40 1.38 1.53 0.67 0.68 0.66 0.75
Primary metals.................................. ......... 1.63 1.70 1.78 1.94 2.46 2.52 2.45 2.50
Fabricated metals.......................................... 1.89 1.88 2.00 2.16 2.98 3.02 3.15 3.46
Machinery, except electrical............................... 2.61 2.62 2.68 2.90 4.18 4.17 4.19 4.51
Electrical machinery....................................... 2.05 2.06 2.13 2.14 3.66 3.62 3.71 3.79
Transportation equipment.................................. 2.11 2.09 2.21 2.34 12.48 12.48 12.61 13.95
Instruments and related products........................... 2.32 2.31 2.33 2.38 1.70 1.71 1.76 1.76
Nondurable goods industries................................... 1.07 1.07 1.09 1.11 0.69 0.71 0.69 0.72
Food and kindred products.................................. 0.99 0.99 0.96 0.94 (X) (X) (X) (X)
Tobacco products................................................... 3.14 3.02 3.25 3.00 (X) (X) (X) (X)
Textile mill products...................................... 1-49 1.48 1.48 1.49 (NA) (NA) (NA) (NA)
Paper and allied products.................................. 1.24 1.23 1.22 1.30 (NA) (NA) (NA) (NA)
Chemicals and allied products.............................. 1.30 1.30 1.35 1.41 (X) (X) (x) (X)
Petroleum and coal products................................ 0.54 0.57 0.62 0.62 (X) (S) (X) (X)
Rubber and plastics products, n.e.c......................... 1.13 1.18 1.20 1.20 (x) (x) (X) (X)
(WA) Not available.
Preliminary. rRevised. (X) Not applicable.
'Excludes the following industries with no unfilled orders: Wood and lumber products; glass containers; metal cans, barrels, and drums; farm
machinery and equipment; motor vehicle assembly operation; other transportation equipment; foods and related products; tobacco; apparel and related
products; building paper: die-cut paper and board; chemicals; petroleum and coal products; and rubber and plastics products, n.e.c.
The following is a description of the survey and definitions
used. These are provided to clarify the meaning of the items
involved and do not represent any revisions from those
definitions previously employed.
DESCRIPTION OF SURVEY
The Manufacturers' Shipments, Inventories, and Orders Survey
(M3-1) provides monthly figures that are comparable to the
annual totals published each year in the Annual Survey of
Manufactures (ASM). The ASM is a probability sample of
approximately 70 01Ci' manufacturing establishments drawn
from the most recent 5-year census universe of about 312,000
establishments. In the ASM, each manufacturing establishment
provides data on employment, I r-.1 shipments, cost of
materials, capital expenditures, and inventories as well as other
selected items. Until 1''t, the ASM did not compile inform-
ation on unfilled orders or new orders. Since the ASM is
establishment based, it provides data for each of the 12-,
manufacturing industries in the Standard Industrial Classifi-
cation (SIC) system and area data for industry groups.
The estimates presented in the M3 report are based on a
sample panel of approximately 5,000 reporting units, consisting
of virtually all manufacturing companies with 1,000 or more
employees and additional medium-sized companies that
sri-. n _r-, the sample coverage in individual industry cells. The
reporting unit for many medium- or single-line companies
comprises all operations of the company. Many of the larger
diversified companies file separate divisional reports for their
operations in different industries, although this divisional
reporting is not followed by all large companies.
Each reporting unit in the monthly panel is classified into
one of 79 industry classifications for tabulation. Many of the
reporting units included mixed industry activity even within the
broad industry categories of the monthly survey. However, the
survey estimating procedure assumes that the month-to-month
changes of the reporting units classified in each industry
category effectively represent the month-to-month movements
of the establishments in the SIC industries which make up the
category. This ratio estimating procedure is used for all items
compiled in the survey except for new orders which is discussed
The M3 series is periodically benchmarked to the ASM for
shipments and inventories. The most recent benchmark was for
1974 hrr.:.uih 1976. In the absence of benchmark data for un-
filled orders, levels were set in August 1962 based upon the
ratio of unfilled orders to sales for companies reporting in the
M3. These levels were reset as of December 1973. Historical
data, 1967-1978, including the seasonally j':'- series, re-
flecting seasonal factors based on data through December 1978,
are published in the M3-1.8 report issued in August 1tJ."
The M3 data are subject to some limitations primarily
resulting from the relatively small sample used to develop the
estimates and the use of divisional and company reports to
extrapolate establishment based data. Precise measurement of
these ,n -: .- -., based on estimates of tire sampling errors is
not available. In addition to the genera of M3 survey
data, the estimated levels of unfilled orders are subject to
further limitations due to the assumptions made in developing
these leve s, the definition of unilled orders, and response
difficulties. These limitations are discussed in greater detail on
pages i iv in the introductory chapter of the latest benchmark
publication mentioned above. Generally, the limitations to the
unfilled orders data primarily apply to the absolute level of
unfilled orders and, to a much lesser extent, to the month-to-
month change in unfilled orders. Since this month-to-month
change in unfilled orders is used to develop the monthly
estimates of new orders, the estimates of new orders are subject
to fewer limitations than the unfilled orders estimates.
EXPLANATION OF TERMS
Value of Shipments-Shipments in the monthly survey are
equivalent to value of shipments as reported in the ASM which
are received or receivable net s.lrnr- values, f.o.b. plant, after
discounts and allowances and excluding freight charges and
excise taxes. Included in shipments are the value of all products
sold, transferred to other plants of the same company, or
shipped on consignment.
Shipments also include receipts of establishments in the
industry for contract work performed for other, resales, receipts
for miscellaneous activities such as the sale of scrap and refuse;
value of installation and repair work performed by employees of
the plant; and value of research and development performed at
the plant. In the ship building industry the value of work done
in a given year varies considerably from the value of shipments
because of the long lead time between the innut of the materials
and labor and the shipments of the conipleted ship. In the
annual survey, therefore, the value of work done during the year
is requested rather than the value of shipments. Value of work
done is also reported by aircraft and missile producers working
on cost-plus contracts.
The value of shipments figures developed from the ASM
contain duplication at the all manufacturing and industry group
levels since the products of some industries are used as materials
by other industries within the industry group. With the
exception of motor vehicles, it is not significant at the 4-digit
SIC group level. Since the M3-1 industry categories typically are
groupings of industries, this duplication is significant for all the
manufacturing, durable goods and nondurable goods categories
and the various market groups. The significance of the dupli-
cation within the specific M3-1 industry groups varies depfrnd.ng
on the 4-digit industry composition of these groups. It is most
pronounced in a few highly integrated industry areas such as
primary metals and motor vehicles and parts.
Since most monthly reports are for the entire company or
major divisions rather than establishments, the companies are
requested to report net sales, i.e., total company billings after
discounts and allowances. Companies which file divisional
reports are requested to treat transfers from the division of the
company to another as if they were net sales to outside
customers. Although this definition of shipments in the
monthly reports differs from that used in the annual establish-
ment reports, it is assumed that the month-to-month changes in
company sales in the industry are representative of the
month-to-month shipments of the establishments in the indus-
Inventories-End-of-month inventories in the monthly survey
are identical in definition to the end-of-year inventories in the
ASM. In the ASM. respondents are asked to report inventories
of individual establishments at approximate current cost if
feasible otherwise, ji book values." Since different methods
of inventory valuation are used (LIFO, FIFO, etc.), the
definition of the aggregate inventories for establishments in an
industry is not precise. The figures on the change in inventories
from one period to the next are of greater significance than the
Inventories are reported by stage of fabrication: (a) finished
goods; (b) work in process; and (c) materials, supplies, fuel, and
other inventories. In using inventories by stage of fabrication at
the all manufacturing and 2-digit industry levels as well as for
the durable and nondurable goods sectors, it should be noted
that a finished product of one industry may be a raw material
for another industry at the next stage of fabrication. Insofar as
The durable and nondurable goods sectors and also the 2-digit
industry groups contain industries with successive stages of
processing, the same type of commodity may be included under
different inventory categories in the aggregate statistics.
New Orders and Unfilled Orders-The unfilled orders shown
in this publication represent the net sales value of goods on
order which have not been shipped. They are net of cancell-
ations and include all adjustments resulting from contract
change documents. Only those orders supported by l.,ri.in.
legal documents such as signed contracts or letter contracts are
included. Some large defense contracts are authorized and
funded in several stages. Only the funded portion of such
contracts are included in these figures.
New orders are not calculated according to the standard ratio
estimate procedure, even though they are collected as a separate
item. The reason for this is that not all companies report new
orders, and some that do limit their reporting to specific
products for which long lead times are required in the
production cycle. These companies, in effect, exclude new
orders received for products that are shipped from inventory.
To take advantage of the higher response rate for shipments
data and to include orders filled from inventory, new orders are
computed by adding the change in the backlog of unfilled
orders to the current month's shipments. Thus, the estimate of
new orders includes orders that are received and filled in the
same month as well as orders that have not yet been filled. The
estimate also includes the effects of cancellations and modifica-
tions of previously existing contracts.
Seasonally adjusted new orders are similarly derived from the
monthly change in the seasonally adjusted backlog of unfilled
orders and seasonally adjusted shipments. Many nondurable
goods industries and some durable goods industries have no
backlog of unfilled orders. Shipments are used as the estimate of
new orders in these industries.
_1 : L,-, rU ..r .,l Commerce
Fi -. ., .. r Tr CENSUS
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