US March factory orders surge +1.5%, versus +0.5% consensus as core capex revised higher
- US March factory orders +1.5% vs +0.5% expected (prior unchanged, revised to +0.3%)
- Factory orders ex-transportation +1.6% vs +1.6% prior (revised from +1.2%)
- Factory orders ex-defense +0.9% vs +0.3% prior
- Durables orders unrevised at +0.8%
- Nondefense capital goods orders ex-aircraft revised to +3.4% from +3.3%; March shipments unrevised at +1.2%
- Computers/electronic products orders +3.6% vs +1.4% prior
- Nondurables orders +2.1% vs +1.9% prior
- Total manufacturing inventories +0.6% vs +0.1% prior
- Inventories/shipments ratio 1.51 months vs 1.52 months prior
This is a clean beat across the board and a meaningful upward revision to February. The headline tripled the consensus estimate and the revision history continues to flatter the underlying trend. The standout remains core capital goods orders ex-aircraft, nudged up to +3.4% — that is a blistering print and reinforces what the durable goods report flagged last week around AI infrastructure and power-related capex.
The computers and electronic products line at +3.6% tells the same story, and the breadth here is notable with ex-transportation, ex-defense, and nondurables all firm. The inventories/shipments ratio ticking down to 1.51 months suggests demand is keeping pace with the build, so this isn’t a stockpiling story masquerading as strength.
Shipments at +1.2% are the cleaner read on activity actually hitting the economy, and that number is solid. Worth watching whether the April data starts to show payback, but for now the manufacturing complex is running hot and I don’t think there will be any let-up in AI capex spending for the next two years.
Few people understand just how big the AI capex boom is. I tried to offer some perspective on it in a post last week and I don’t even think the numbers are hitting the economy yet.
This article was written by Adam Button at investinglive.com.