New orders at United States factories increased in December while shipments fell, according to a report released by the Commerce Department Tuesday.

New orders for manufactured goods in December increased 0.4% following a 0.8% November decrease. New orders for 2002 were 0.8% below the prior year. New orders for manufactured durable goods -- those items designed to last three years or more -- fell in December by 0.2%, revised from the previously published 0.2% increase. New orders for manufactured nondurable goods increased 1.1%.
Shipments during December fell 0.6% following a 1.1% November decrease. Shipments for 2002 were 1.1% below the prior year. Shipments of manufactured durable goods in December decreased 2.0%, revised from the previously published 1.5% decrease, the lowest level since September 2001. Shipments of manufactured non-durable goods increased 1.1%.
Inventories increased 0.5%, following a 0.2% November decrease, the largest jump since January 2001.
"The December report is not easy to interpret," said Newport Communications Senior Economist Jim Haughey. "The shipments declines and the jump in inventory -- probably unwanted -- are largely the consequence of the weak retail sales in September through November, while the rise in orders is the first sign that the strong gain in consumer spending in December is beginning to re-energize manufacturing."
He said it does not yet look like this is the beginning of a sustained pickup in manufacturing, adding the sector remains stalled, waiting for the weakened dollar to spur exports and a return to rising confidence.
"War concerns have cut the confidence needed for major purchases, so the durable sector will be sluggish for a few more months," said Haughey. "By contrast, the non-durable sector recorded gains and shipments and orders. However, this is not a promising as it first appears. Higher energy prices account for most of the gain with a large, non-sustainable jump in food shipments accounting for the rest. With the number of unemployed still rising, non-durables shipments gains will average very minimal into summer."