Save US Durable Goods New and Unfilled Orders

New orders YoY and unfilled orders YoY are the leading indicators for the final stage of inventory replenishment.

When companies start inventory replenishment by placing a large amount of new orders, unfilled orders accumulate. When unfilled orders catch up with or exceed new orders, it means the company is not able to sell off inventories. New orders might decline at this point while unfilled orders remain high. A rapid decrease in new orders lays an impact on the overall economy.

Based on our observations, a new cycle of inventory replenishment occurs every 3 to 4 years.