February manufacturing shipments fell 1.6% and orders dropped 1.2% in a new Commerce Department report released Thursday.

Both had risen by larger amounts in January. For the first two months of 2003, orders are up 0.5% from the last quarter, while shipments are unchanged. This is keeping freight volume about unchanged.
The largest changes in February were a 4.6% fall in electronic shipments and a 3.1% drop in primary metal shipments. Sales in both of these markets had been rising in recent months and are still likely to post a small gain for the current quarter.
Inventories declined 0.1%, so the lower shipments were apparently anticipated, and no surplus inventory problems were created.
Jim Haughey, Newport Communications' senior economist, said the weak February manufacturing report was no surprise after earlier weak February reports for consumer confidence, employment and retail sales. Early March data for retail sales and employment remain depressed but so far shows no further deterioration.
So first quarter GDP is still expected to be positive -- probably about 1% -- slightly below the 1.4% reported for the last quarter and reconfirmed in the final estimate from the Commerce Department, Haughey said..