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32. 1997 Economic Census





1236. Value of Manufacturers' Shipments, Inventories, and New Orders by Marketing Grouping

[In millions of dollars (2,475,906 represents 2,475,906,000,000). Based on a sample survey of most manufacturing companies with $500 million or more in annual shipments; for description, see summary below table]

 
Shipments Shipments Shipments Inventories, not seasonally adjusted (Dec. 31) Inventories, not seasonally adjusted (Dec. 31) New Orders New Orders New Orders
Market Grouping
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
 
    All manufacturing industries.......................................................... 2,475,906 2,695,432 2,840,375 2,912,228 2,878,167 3,004,727 3,127,625 3,348,019 3,594,663 3,715,460 3,929,419 4,052,248 4,259,532 332,619 363,300 384,539 397,850 383,509 374,906 375,982 395,974 421,285 427,130 446,131 456,330 460,048 2,512,663 2,739,240 2,874,861 2,934,086 2,865,665 2,978,548 3,092,381 3,356,797 3,607,586 3,749,299 3,952,025 4,033,676 4,279,186
 
Market categories:
  Automotive equipment.............................................................................. 105,027 112,479 118,728 110,537 105,892 120,632 134,229 155,406 160,793 162,253 169,145 174,876 195,472 6,296 6,392 6,399 6,834 6,462 6,588 6,776 7,284 7,537 7,697 7,755 8,265 8,411 105,265 112,298 118,385 110,181 106,058 120,525 134,526 155,702 160,887 162,310 169,310 174,795 195,553
  Home goods and apparel.............................................................................. 162,547 168,547 173,813 174,969 175,357 185,588 195,574 205,985 210,653 210,324 220,994 226,968 239,710 24,485 25,788 26,269 26,134 25,275 25,717 27,423 29,409 30,359 28,056 29,226 30,811 30,522 163,728 168,005 174,574 175,162 175,921 185,713 194,976 205,505 211,040 209,912 222,405 226,721 240,005
  Consumer staples.............................................................................. 531,790 568,799 616,035 658,793 667,740 678,502 691,292 706,036 742,164 780,340 809,598 830,771 887,224 47,326 50,390 54,062 58,104 58,513 60,459 59,946 61,776 65,704 67,944 71,473 72,343 75,925 531,778 569,099 616,054 658,631 667,789 678,613 691,346 706,182 742,360 780,545 809,563 830,983 888,027
  Machinery and equipment.............................................................................. 384,526 427,220 454,632 471,815 469,599 500,554 524,479 569,333 613,526 652,978 711,993 776,424 816,782 70,571 79,601 88,351 92,510 90,692 86,871 86,613 92,596 99,957 104,241 111,413 113,597 111,057 400,962 462,470 496,955 500,441 462,856 491,195 505,542 567,922 624,687 672,605 729,607 774,254 815,394
  Business supplies.............................................................................. 197,175 212,182 225,418 239,008 236,499 241,855 248,468 258,551 276,451 289,085 302,490 305,988 319,628 18,964 20,759 21,676 23,036 22,160 22,130 21,886 23,155 25,052 25,326 26,644 27,239 27,461 198,008 212,721 224,989 239,042 236,447 241,903 248,203 258,913 276,675 289,251 302,437 306,077 320,305
  Construction materials and
   supplies.............................................................................. 164,865 175,594 180,083 180,604 171,876 184,498 199,227 217,556 228,247 238,116 252,549 260,244 277,039 20,812 22,544 22,917 23,271 22,047 22,283 23,488 24,939 26,381 26,721 27,689 28,125 29,968 165,396 176,043 179,546 180,616 172,621 184,385 198,463 219,305 228,242 239,060 253,766 259,859 277,167
  Defense products.............................................................................. 105,770 103,628 99,765 102,024 97,563 92,889 86,034 80,793 78,031 75,896 79,523 83,246 82,205 31,212 33,127 34,092 34,225 29,473 23,630 21,858 19,230 17,146 16,067 16,442 18,604 18,171 108,955 101,768 93,788 97,102 87,932 78,494 73,530 76,283 76,598 81,145 72,066 76,617 80,373
  Other material, supplies and
   intermediate products.............................................................................. 824,206 926,983 971,901 974,478 953,641 1,000,209 1,048,322 1,154,359 1,284,798 1,306,468 1,383,127 1,393,731 1,441,472 112,953 124,699 130,773 133,736 128,887 127,228 127,992 137,585 149,149 151,078 155,489 157,346 158,533 838,571 936,836 970,570 972,911 956,041 997,720 1,045,795 1,166,985 1,287,097 1,314,471 1,392,871 1,384,370 1,462,362
 
Durable goods industries:
  Nondefense capital goods.............................................................................. 295,334 333,402 350,870 370,804 369,796 389,448 400,882 429,272 475,387 512,068 563,933 624,534 659,952 66,975 75,456 84,621 88,400 86,277 81,647 80,561 86,884 94,498 98,027 104,787 106,039 101,952 313,127 373,294 395,855 399,966 365,655 378,293 380,329 428,364 486,134 535,575 577,978 620,400 659,457
    Excluding aircraft and parts.............................................................................. 254,085 283,785 295,736 302,331 291,225 308,487 330,245 368,193 413,760 448,495 483,149 528,855 561,200 50,538 55,723 59,244 58,198 55,965 55,008 55,908 60,949 68,579 66,453 69,237 67,978 70,626 258,850 291,681 297,151 301,627 283,152 309,575 331,278 380,160 418,414 450,084 490,101 532,260 569,833
  Defense capital goods.............................................................................. 109,404 104,687 99,993 102,371 97,623 91,809 84,085 77,096 73,415 71,947 75,194 79,672 79,401 33,277 35,457 36,549 36,609 31,323 24,809 22,557 19,665 17,305 16,178 16,693 19,019 18,612 111,639 102,728 93,398 96,638 87,213 76,155 71,904 71,683 70,903 77,283 67,706 73,169 77,328
  Durables excluding capital goods.............................................................................. 892,794 983,412 1,027,037 1,012,138 984,579 1,060,609 1,145,668 1,283,208 1,378,227 1,420,144 1,519,572 1,571,781 1,668,120 116,091 126,597 130,888 132,354 126,521 125,862 130,188 140,452 149,335 152,342 157,286 162,357 166,560 904,946 988,894 1,023,411 1,010,397 985,319 1,061,246 1,144,741 1,294,461 1,384,341 1,423,678 1,535,024 1,566,124 1,688,376
 
Miscellaneous series:
  Producers' durable equipment.............................................................................. 788,077 865,592 908,212 914,306 900,144 966,194 1,032,475 1,143,391 1,225,170 1,285,908 1,383,145 1,476,942 1,569,970 123,157 136,525 146,112 149,844 145,581 141,976 144,239 155,298 165,868 171,014 179,571 184,320 184,005 804,162 897,834 942,966 938,578 888,772 954,302 1,016,530 1,151,557 1,240,694 1,304,326 1,405,864 1,473,332 1,566,941
  Household durable goods.............................................................................. 69,444 73,667 78,138 78,456 78,122 82,276 88,522 95,167 98,645 98,437 106,074 112,406 125,206 11,749 12,466 13,008 12,903 12,164 12,008 12,499 13,834 14,676 14,160 14,549 15,683 15,894 69,526 73,599 78,242 77,946 78,314 82,175 88,914 95,500 98,500 97,963 107,403 111,784 125,491
  Information technology industries.............................................................................. 143,307 158,217 159,251 163,187 160,526 173,501 179,581 199,492 223,048 247,295 270,844 298,064 324,882 26,249 29,441 31,446 30,319 29,401 28,652 28,506 29,923 34,170 31,765 32,528 30,317 32,727 143,845 160,838 157,396 162,530 157,418 172,526 178,434 202,336 223,687 246,156 272,605 299,210 330,613
  Health care equipment and
   products.............................................................................. 63,251 71,028 77,791 86,082 93,949 99,690 106,335 108,896 114,691 122,805 132,540 144,158 156,913 9,151 10,474 11,403 12,200 13,334 14,089 14,233 14,422 15,621 16,505 17,853 19,082 20,332 64,114 71,661 79,361 86,637 93,344 101,002 105,737 107,266 114,183 122,984 133,451 145,319 157,363


Source: U.S. Census Bureau, Current Industrial Reports, Series M3-1(97), Manufacturers' Shipments, Inventories, and Orders: 1987-1997.

http://www.census.gov/ftp/pub/indicator/www/m3/index.htm

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MANUFACTURERS' SHIPMENTS, INVENTORIES, AND ORDERS (M3) SURVEY

DESCRIPTION OF SURVEY

The Manufacturers' Shipments, Inventories, and Orders (M3) survey provides broad-based, monthly statistical data on economic conditions in the domestic manufacturing sector. The survey measures current industrial activity and provides an indication of future business trends. Data are used by the Executive Branch of the Government for developing economic, fiscal, and monetary policy; the Bureau of Economic Analysis as components of the gross domestic product estimates; and trade associations, corporate economists, and other members of the business community as an analytical tool for assessing the current and future economic condition of the country.

COMPOSITION OF INDUSTRY CATEGORIES

There are 80 separately tabulated industry categories in the M3 survey. These categories are groupings of the 459 manufacturing industries as defined in the 1987 Standard Industrial Classification (SIC) Manual. Because companies provide data on a voluntary basis, reporting in many of these 80 categories is not sufficient to warrant separate publication of the data. Consolidated reporting by some large companies also limits the quality of the data in some categories. A company which reports on a consolidated basis (entire company or a division) is included in the M3 category in which the reporting unit as a whole is classified and has no influence on the movement of the other industries which may be included in its combined report. As a result, it has been necessary to combine the 80 industry categories into 45 publication levels for shipments and total inventories. For new and unfilled orders and inventories by stage of fabrication, it has been necessary to introduce further combinations because of the lower response rates for those items.

COMPOSITION OF THE SURVEY PANEL

The monthly M3 estimates are based on information obtained from most manufacturing companies with $500 million or more in annual shipments. In order to strengthen the sample coverage in individual industry categories, the survey includes selected smaller companies. The sources of the companies for the survey are the quinquennial censuses of manufactures and the annual surveys of manufactures in the interim years. For firms that operate in a single M3 industry category, the reporting unit typically comprises all operations of the company. Most large, diversified companies, however, file separate reports for divisions with significant activity in different industrial areas. The composition of each company or reporting unit of a company in the survey usually includes more than one plant or establishment and frequently includes industry activities outside the M3 category in which it is classified. The survey methodology described later in this chapter assumes that the month-to-month changes of the total operations of the reporting units classified in each industry category effectively represent the month-to-month movements of all establishments which make up the category. In 1962, the initially selected sample for this survey included all companies with more than 1,000 employees and smaller companies selected with probabilities proportional to their employment size within each industry category. As there was some deterioration in response rates for companies with between 100 and 1,000 employees, in January 1975, the staff selected a supplemental sample of approximately 1,000 companies from the universe of companies in this size range in order to strengthen the estimates. Although the response rate was only about 60 percent for this group, beginning in January 1978 these data were added to the panel and included in the calculations of the monthly estimates. Because of poor response rates, the survey no longer included companies with less than 100 employees; instead, data for these companies were estimated by using overall industry month-to-month movements based on data reported by the larger companies. In recent years, the size of the value of shipments of the company or reporting unit rather than the employment size has influenced the selection of companies to increase response rates. Using this criterion, census staff visit or otherwise contact large companies that did not report in the survey to request their participation or reconsideration of a previous decision not to participate. Also, staff request data for large diversified reporting companies to provide additional industry categories not previously provided. Another method used for improving response has been contacting nonreporting companies by letter. Staff send letters on an ongoing basis to companies in industry categories with low response rates. In 1990, staff selected a probability sample and mailed requests to about 400 midsize companies in the plastics industry. The purpose was to test the viability of probability sampling, especially in industries comprised primarily of smaller, less diversified companies. As a result of these efforts, we increased response by adding about 45 to 55 percent of the companies contacted to the panel. However, respondent dropouts frequently offset these increases. The current coverage levels in the survey show that reported data represent approximately 55 percent of the shipments estimates at the total manufacturing level, while the individual coverage rates for the 20 two-digit major SIC industries vary from about 20 to 99 percent.

LIMITATIONS OF THE DATA

The monthly data presented in this publication are subject to both sampling and nonsampling errors. Sampling errors occur because reports are received from a sample rather than from the complete universe of manufacturing companies. Because the present composition of the panel is not based on a probability sample, the amount of sampling error cannot be quantified. Nonsampling errors, on the other hand, are attributable to many sources. The use of company or divisional reports to estimate the monthly change for establishments is one source of nonsampling error. The use primarily of large companies to represent the month-to-month movement of all companies is another potential source. In addition, response and processing errors may be present, although computer edits and analytical review of the data detect the most significant errors of this kind prior to tabulation.

MONTHLY ESTIMATION PROCEDURE

A link relative procedure derives the monthly universe estimates of shipments, unfilled orders, and total inventories for each industry category. The universe estimate for the previous month is multiplied by the monthly ratio of change tabulated for reporting companies in the current month to arrive at a universe estimate for current month. When an individual company reports unusually large changes from the previous month, or when a particular company has unique data patterns differing substantially from the movement shown by the rest of the reporting panel in a particular industry category, the company is excluded from the ratio of change calculation but included in the universe estimate of level. The effect of this procedure is to restrict the estimation for nonrespondents and firms not in the survey panel to the general trend of the industry. The universe estimate of new orders is derived from the monthly estimate of shipments plus the change in unfilled orders between the current and prior period. The estimate includes orders that are received and filled in the same month as well as orders that have not yet been filled. It also includes the effects of cancellations and modifications of previously reported orders. The standard ratio estimate procedure is not followed for new orders because not all companies report new orders, and some that do report this item limit their reporting to specific products for which long lead times are required in the production cycle. These companies, in effect, exclude new orders received for products that are shipped from inventory. A modified procedure also is used to estimate the stage of fabrication inventory data. In this procedure, the total inventory data estimated for each tabulated industry category are retabulated to the appropriate two-digit SIC major group levels and serve as control totals for the stage of fabrication data. Initial estimates are made for each of the stages of fabrication at the two-digit SIC level using the ratio estimation procedure. The differences between the sum of the stage of fabrication detail and total inventories at the two-digit SIC level are then allocated proportionally to the stage of fabrication figures to form the estimates. The reasoning behind this procedure is that a significant number of companies report total inventories but cannot report inventories by stage of fabrication.

TRADING DAY ADJUSTMENT

Variations in the rate of manufacturing activity resulting from different numbers of trading days in the same month for different years and variations in the length of months can be an important cause of month-to-month fluctuations in the shipments data. For many industries, these irregularities can be identified approximately and removed so that the underlying trend cycle stands out clearly. Recent software and data processing improvements have facilitated research and implementation of unique trading day adjustment factors for each series. These improvements include refinements to the trading day analysis in the X-11 seasonal adjustment program, additions to diagnostic software that identifies progressively unstable data patterns, and redesign of the monthly survey data processing system. Most of the shipments series have trading day factors calculated in the trading day regression analysis routine of the X-11 software. The adjustment from
1987 forward used these new factors. Table FN1 of M3-1(90) shows the factors used before 1987. However, eight of the shipment series did not have identifiable trading day patterns and are only being adjusted for length of month variations.

SEASONAL ADJUSTMENT METHODOLOGY

The monthly data are adjusted for seasonality at the most detailed level tabulated in the survey, using the X-11 ARIMA version of the Census Bureau's seasonal adjustment program. The seasonally adjusted estimates for shipments, unfilled orders, and total inventories for M3 industry categories are calculated by dividing the unadjusted estimates by seasonal adjustment factors computed by the X-11 ARIMA seasonal adjustment program. Seasonally adjusted new orders are computed by adding the changes between current and prior period seasonally adjusted unfilled orders to the current month's seasonally adjusted shipments. The inventory by stage of fabrication data are seasonally adjusted at the two-digit SIC major group level for each stage. If the sum of the adjusted stage of fabrication does not equal the major group totals resulting from summing the seasonally adjusted total inventories for the individual industries, the difference is proportionally allocated to the stage of fabrication detail. Staff calculate seasonal factors concurrently and include the current period observation in the calculation of the seasonal factor for that month. The factors reflected in this report are based on using data from January 1982 through December 1996 for shipments, unfilled orders, and inventories. For information on specific measures used in the seasonal adjustment analysis, selection of options within the X-11 program for the individual industry series, and tests for the presence of seasonality, contact the Manufacturing and Construction Division, U.S. Census Bureau, Washington, DC 20233, or call 301-457-4749.

BENCHMARK PROCEDURE

The M3 survey data are benchmarked to reduce both sampling and nonsampling errors. The relatively small monthly sample size as well as the differences that result from collecting the monthly data on a divisional basis as compared to the benchmark data on an establishment basis account for most of the revision. Also, some monthly reports received too late to be included in the monthly publications are added to improve the revised estimates of change of the historical monthly data. The benchmarking process for this report included comparing monthly data reported by large companies with their annual data submitted in the 1994 and 1995 Annual Survey of Manufactures (ASM). Estimates of annual shipments and end-of-year total and stage of fabrication inventories calculated in the monthly survey were benchmarked directly to the data compiled in the quinquennial censuses of manufactures and the interim ASM's. The unfilled orders levels were adjusted based on changes in the ratio of unfilled orders to shipments of companies reporting in the monthly survey and the ratio of the ASM shipments estimate to the summed monthly survey data. Since new orders are defined as the change in unfilled orders between the current and prior periods plus the current period shipments, implicit benchmark estimates for new orders were derived. * DEFINITION OF TERMS

VALUE OF SHIPMENTS

The value of shipments data in the M3 survey represents net selling values, f.o.b. plant, after discounts and allowances and excluding freight charges and excise taxes. The ASM uses the same definition. However, the data reported in the two surveys frequently are not equal because of differences, discussed earlier, in the reporting unit. For multiestablishment companies, the M3 reports typically are company- or divisional-level reports that encompass groups of plants or products. The data reported are usually net sales and receipts from customers and do not include the value of interplant transfers. The reported sales are used to calculate month-to-month changes which bring forward the universe estimates developed from the ASM. The value of products made elsewhere under contract from materials owned by the plant is also included in shipments as well as receipts for contract work performed for others, resales, miscellaneous activities such as the sale of scrap and refuse, installation and repair work performed by employees of the plant, and the receipts for research and development performed at the plant. In the shipbuilding industry, the value of work done in a given year varies considerably from the value of shipments because of the long lead time between the start and completion of a large vessel. In both the annual survey and the M3, the value of work done during the year, rather than the value of shipments, is requested. The same procedure is followed for aircraft produced on a cost-plus contract. Aircraft produced on a fixed-price contract are reported in the usual manner when the products are shipped. Where value of work done is reported in place of shipments, the work-in-process inventories are normally charged to the customer as costs are incurred and are not accumulated as finished goods inventories by the shipyard or the aircraft producer. The value of shipments figures developed from the ASM contain duplication at the M3 industry category and higher level aggregates, since the products of some four-digit SIC industries are used as materials by other industries within the same M3 industry aggregate. The significance of the duplication within the specific M3 industry categories varies depending on their four-digit industry composition. It is most pronounced in a few highly integrated industry areas, such as primary metals and motor vehicles and parts.

INVENTORIES

Inventories in the M3 survey are collected on a current cost or pre-LIFO (last in, first out) basis. Because different inventory valuation methods are reflected in the reported data, the estimates differ slightly from replacement cost estimates. Companies using the LIFO method for valuing inventories report their pre-LIFO value; that is, the adjustment to their base-period prices is excluded. In the ASM, inventories are collected according to this same definition. However, there are discontinuities in the historical data in both surveys. Until 1982, respondents were asked in the ASM to report their inventories at book values; that is, according to whatever method they used for tax purposes (LIFO, FIFO, and so forth.) Because of this, the value of aggregate inventories for an industry was not precise. Effective with the 1982 Census of Manufactures, instructions for reporting inventories changed. LIFO users were asked to report inventories prior to the LIFO adjustment, as well as the LIFO reserve and the LIFO value after adjustment for the reserve. Because of this change, the 1982 census data for inventories were published on both bases. Inventory data in subsequent ASM's are available only on a pre-LIFO basis, with no book value estimates comparable to the earlier data. This change in instructions for reporting current cost inventories was carried to the monthly survey beginning in January 1987. The data for 1982 to 1987 were previously redefined (but not recollected) on a pre-LIFO or current cost basis. As described in the section on benchmarking methodology, the procedure used in adjusting these monthly estimates from a book-value basis to the pre-LIFO levels used the pre-LIFO end-of-year levels from the ASM as constraints and the same general procedure for minimizing revisions to the month-to-month change in the monthly book-value data . Inventory data are requested from respondents by stage of fabrication; that is, finished goods, work in process, and raw materials and supplies. There are several limitations to the quality of these data for two reasons. First, response to the stage of fabrication inquiries is lower than for total inventories because all companies do not keep their data monthly at this level of detail; those companies which do maintain monthly detailed records frequently do not have data for all three stages of fabrication or have quantity (physical volume) data only. Second, a product considered to be a finished good in one industry, such as steel mills shapes, may be reported as a raw material in another industry, such as stamping plants. Therefore, within the two-digit SIC major groups the same type of inventory may be included under different stage of fabrication categories. Like total inventories, stage of fabrication inventories are also benchmarked to the ASM pre-LIFO data, but the stage of fabrication data are benchmarked at the two-digit major group level.

NEW ORDERS RECEIVED AND UNFILLED ORDERS

New orders, as reported in the monthly survey, are net of order cancellations and include orders received and filled during the month as well as orders received for future delivery. They also include the value of contract changes which increase or decrease the value of the unfilled orders to which they relate. Orders are defined to include those supported by binding legal documents such as signed contracts, letters of award, or letters of intent, although in some industries this definition may not be strictly applicable. In the case of letters of intent, the full amount of the sales value is included if the parties are in substantial agreement on the amount; otherwise, only the funds specifically authorized to be expended are included. Unfilled orders include orders (as defined above) that have not been reflected as shipments. Generally, unfilled orders at the end of the reporting period are equal to unfilled orders at the beginning of the period plus net new orders received less net shipments.

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https://allcountries.org/uscensus/1236_value_of_manufacturers'_shipments_inventories_and.html

These tables are based on figures supplied by the United States Census Bureau, U.S. Department of Commerce and are subject to revision by the Census Bureau.

Copyright © 2006 Photius Coutsoukis and Information Technology Associates, all rights reserved.