New federal data released Tuesday showed a 1.8% increase in U.S. factory orders for September, bringing total new orders to $677.2 billion. The rise marks the third straight month of growth and follows a revised 0.3% gain in August.
Durable‑goods strength led the national uptick
Transportation equipment drove the strongest durable‑goods contribution, with new orders up 4.6% to $119.9 billion. Overall shipments rose 1.3% to $668.5 billion, while the backlog of unfilled durable‑goods orders grew 0.9% to $1.62 trillion. These figures are seasonally adjusted but do not reflect inflation.
Texas manufacturers feel the slowdown
While the national picture remains positive, a Dallas Federal Reserve manufacturing survey released Oct. 26 indicated that Texas‑based factories are seeing weaker momentum in October. The survey’s production index fell from 29.5 in September to 15.8 in October. Likewise, the new‑orders index dropped from 30.7 to 9.3, and the shipments index slipped from 24.8 to 8.4. All three are diffusion indexes, meaning a lower number signals fewer firms reporting increases than decreases.
The Dallas Fed collected responses from 64 of 114 manufacturers between Oct. 13 and Oct. 21. Positive readings still indicate a majority of respondents reporting growth, but the sharp declines suggest the expansion is becoming less broad‑based.
Rising input costs add pressure
Raw‑material price pressures persisted, with the index tracking prices paid climbing to 55.3 from 52.2—well above its historical average of 28.1. Finished‑goods prices also rose, with the related index moving to 29.9 from 27.6, indicating more manufacturers are raising prices than cutting them.
Company spotlight: Trinity Industries
Dallas‑based Trinity Industries illustrated the mixed picture. The firm reported 2,190 new railcar orders in the third quarter, a sharp increase from 350 a year earlier. Despite the order surge, consolidated operating profit fell from $118.6 million to $95.6 million, a roughly 19% decline. Trinity attributed the weaker profit to lower gains on lease‑portfolio sales and higher corporate expenses.
The company’s backlog remained below its year‑earlier level even as new orders jumped, underscoring the uneven nature of demand and profitability in the sector.
Credit costs curb investment plans
Higher borrowing costs are also affecting Texas manufacturers. In a separate Dallas Fed follow‑up survey, 44% of 25 respondents who answered a question on credit costs said they had delayed or reduced capital spending or expansion because of higher financing expenses.
Looking ahead
The latest Census report suggests stronger national order activity heading into the fourth quarter, while the Texas survey points to a slowdown in the breadth of factory growth. The Dallas Fed will release its next Texas Manufacturing Outlook Survey on Nov. 30, and the Census Bureau has scheduled its October advance durable‑goods report for Nov. 25.
Original reporting: The Dallas Express — read the source article.
