New figures show the number of new orders and shipments in the manufacturing sector posted solid month-to-month gains, but they are still running behind last year's levels.

The U.S. Commerce Department reported on Wednesday that new orders for manufactured goods increased 1.5% in October. This follows a 2.4% September decrease. Year to date, new orders for 2002 are 1.5% below the same period a year ago.
Shipments increased 1%, following a 0.3% September decrease. Year to date, shipments for 2002 are 1.7% below the same period last year.
Inventories increased slightly, following a 0.2% September increase. The inventories-to-shipments ratio was 1.32, down from 1.33 in September.
When these numbers are broken down, the big pickup for new orders was for durable goods, which increased 2.4% in October, down slightly from the previously published 2.8% increase. New orders for manufactured nondurable goods increased 0.6%.
Shipments of manufactured durable goods in October increased 1.3%, revised from the previously published 1.2% increase. Shipments of nondurable goods increased 0.6%, the highest level since August 2001.
Newport Communications Senior Economist Jim Haughey said that despite this increase, this only gets heavy manufacturing back to the June level because of a weak summer. However, the sector should continue to improve.
"Most of the economic reports for October are now in, and all have shown a
strong pickup from the weak September," he said. "Preliminary employment, trade and retail data for November all show more growth in November, especially for food and consumer electronics."
He also predicts further gains in manufacturing shipments are likely by year-end, since inventories were steady in October and orders rose 1.5%.
A separate report on productivity in the United States shows it has rebounded more strongly than indicated by earlier estimates.
New figures released Wednesday by the U.S. Labor Department show a 5.1% annual increase in the third quarter of the year, far better than the 4% annual pace estimated a month ago, and a considerable improvement over the 1.7% annual rate during the second quarter of the year.
This measure of the output of the amount of work per hour is the strongest showing since a 4.5% rate in the first quarter of the year, and is better than many analysts were expecting.