New US Manufacturing Orders Decline in September

By: Epoch Times - Economy Posted On: November 06, 2024 View: 0

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This is the seventh monthly decrease in the past 12 months.

The American manufacturing industry saw a decline in new orders in September, signaling weakness in the sector, according to latest data from the U.S. Census Bureau.

New orders for manufactured goods decreased by $2.8 billion, or 0.50 percent, in September, to $584.2 billion, according to a Nov. 4 statement from the agency. New orders—the volume of orders placed by customers for goods and services—is a key economic health indicator because it reflects the robustness of the overall business environment. Rising new order data is an indication that companies are expanding production or capacity and signals future investments. Policymakers use this data when formulating economic policies.

New orders have been down in four of the last five months and seven out of the past 12 months, suggesting an ongoing weak manufacturing environment. In September, sectors such as machinery, computers and electronic products, and transportation equipment saw a decline in new orders.

There was an increase in unfilled orders, with the metric up in 49 of the previous 50 months. Meanwhile, shipments fell in September, with inventories also declining.

A few days earlier, S&P Global released its manufacturing report for the United States, noting reductions in output and new orders in October. The uncertainty prior to the U.S. presidential elections was cited as a key reason for declining orders.

Manufacturing production “continues to fall,” albeit at the slowest pace in three months, it said. While inflationary pressures softened, input costs have continued to rise.

Falling sales are forcing businesses to reduce output. However, there was “increasing confidence” that output will increase over the coming year, the report noted.

Chris Williamson, chief business economist at S&P Global Market Intelligence, pointed out that orders for investment goods such as machinery and plants have declined “especially sharply” over the past months.

There is “reluctance among firms to expand in the face of heightened geopolitical uncertainty, with firms citing tensions around the U.S. election as well as intensifying international conflicts,” Williamson said.

“There is, therefore, some potential upside to the manufacturing sector if the political environment becomes more conducive to spending and investment after the election.”

Trump Impact

Manufacturing was a key issue in the 2024 presidential elections, with President-elect Donald Trump vowing to revive the sector.

During a speech in September, Trump promised to impose tariffs on foreign imports and said that his administration would provide domestic manufacturers with lower taxes, regulatory burdens, and energy costs.

“I want every manufacturer that has left us to be filled with regret,” Trump said.

“I want German car companies to be American car companies. I want them to build their cars in this country, not in Germany. I want Asian electronics companies to become Michigan electronics companies.”

Trump has won the 2024 race and is set to return to the White House in January.

Following his election win, Jay Timmons, president and CEO of the National Association of Manufacturers, congratulated Trump for his “strong performance across manufacturing-intensive states.”

He pointed out that the sector was facing “monumental headwinds” today, with optimism in the industry at the lowest level in years.

The cost of business continues to rise, with owners burdened by “aggressive” agency overreach, looming tax hikes, and other policies.

A second Trump administration can work with manufacturers to “roll back burdensome regulations, unleash American energy security, power the economy of the future with an all-of-the-above energy strategy, and restore the dignity of manufacturing work,” Timmons said.

“With competitive taxes, sensible regulation, and unleashed American energy, manufacturers are ready to win big. We are prepared to work closely with you and your new administration to build a future where our workers thrive and American leadership remains second to none.”

Last month, the Alliance for American Manufacturing said that industrial investment and interest rate reduction could spur a rebound in the sector.

Scott Paul, president of the group, noted that the U.S. Federal Reserve has already reduced interest rates by half a percentage point since Sept. 18 and has announced two more rate cuts.

“With new factories being built across the country to make semiconductors, solar panels, electric vehicles, batteries, and more, there’s a lot to be optimistic about. It’s vital that we see these investments through,” he said.

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