CHICAGO U.S. metal shipments and new orders declined in July compared with the previous month, but inventories changed only marginally, according to non-seasonally-adjusted Census Bureau data released Friday.
Primary metal producers shipments were valued at nearly $27.55 billion last month, down 5.9 percent from June, while new orders totaling $26.8 billion were 2.5 percent lower. But year-to-date shipments were up 19.1 percent compared with the first seven months of last year, while new orders were 17.1 percent higher.
Metal fabricators shipments were valued at nearly $26.67 billion in July, a 7-percent decline from the previous month, while new orders totaling $26.58 billion were down 4.7 percent. Shipments in the first seven months of the year were up 6.2 percent from a year earlier, while new orders were 5.9 percent higher.
Primary metal producers inventories were virtually flat in July vs. June, while fabricators inventories inched up just 0.7 percent.
For the entire durable goods sector, July shipments grew 2.6 percent on a seasonally adjusted basis, and have increased in seven of the last eight months. Transportation equipment shipments rose 8.4 percent, while defense orders fell 13.6 percent.
New orders in July were up 4.2 percent, according to the Census data, although excluding transportation, new orders fell 0.4 percent.
One economic analyst said that although aircraft and motor vehicles added strength in July, a seasonal decline in turbines offset the improvement.
"Once again, the headline orders number overstates strength in business spending," said Paul Edelstein, director of financial economics for consultancy IHS Global Insight Inc. "If not for civilian aircraft and motor vehicles, orders would have fallen by 1.7 percent in July."
Other manufacturing sectors are "soggy" but not "dreadful," he said. "Looking ahead to August, turbines should rebound as they typically do in the second month of the quarter. (But) strength in motor vehicles in July was mostly the result of an unusual production schedule at automakers, which will likely reverse next month."
He expects capital investment to rise 5 to 7 percent during the second half of 2012.