A long-delayed federal report shows U.S. factory demand held steady in September, even as distributors continue to work through uncertain supply conditions and elevated order backlogs.
The U.S. Census Bureau has released its full report on manufacturers’ shipments, inventories and orders for September — more than two months late due to the October federal government shutdown that halted data operations and pushed multiple economic releases off schedule.
The newly published figures show new factory orders rising to $612.6 billion, up 0.2% from August’s revised total. The increase is modest, but it follows a stronger August revision that reshaped what initially looked like a weaker summer. Orders for long-lasting manufactured goods rose more solidly, while non-defense capital goods excluding aircraft, a key gauge of business investment, climbed 1%.
Despite the incremental pickup in orders, shipments remained flat at $606.7 billion, underscoring a widening gap between goods being booked and goods leaving production lines. Manufacturers continue to face a growing volume of work already on the books: unfilled orders reached $1.49 trillion, rising 0.7% from August and extending a persistent backlog that has built up across aerospace, industrial machinery, and other capital-intensive sectors.
Inventories dipped marginally to $946.8 billion, suggesting manufacturers are still taking a disciplined approach to stock levels rather than rebuilding aggressively. The unfilled-orders-to-shipments ratio edged up again — now just under 7, meaning seven months’ worth of order backlog relative to current shipping pace. The inventories-to-shipments ratio held steady at 1.56, reinforcing the slow-moving nature of goods already in warehouses.
For distributors, the delayed report — arriving just before year-end — provides confirmation that demand has not fallen off, but it does little to erase the operational uncertainty this fall has brought. Without timely visibility into production and inventory trends, many have been forced to make purchasing decisions based on anecdotal market signals, shifting end-customer forecasts, and inconsistent lead times from suppliers.
The imbalance between new orders and shipments also complicates planning. If manufacturers continue to book more than they ship, distributors may face longer replenishment cycles and need to build in additional buffer stock to prevent stock-outs — a costly proposition while borrowing rates remain high. Yet over-buying carries risks of its own and should demand cool unexpectedly.
Industry analysts note that the underlying data suggests a manufacturing sector that is stable but still growing slowly, with conditions varying widely across categories. Business-focused segments — such as equipment and technology investments — remain resilient, while goods tied to consumer spending continue to show more volatility.
The Census Bureau has said it is taking steps to normalize its release calendar in the weeks ahead, but economic data will continue to play catch-up into early 2026. In the meantime, distributors are navigating a market where the fundamentals remain intact — yet the timing, availability and cost of products continue to require close attention and shorter-term decision-making.
Whether the slight September gains turn into a stronger finish to the year will depend less on order books, analysts say, and more on whether manufacturers can convert backlog into shipments fast enough to improve supply-chain flow heading into 2026.
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