The Census Bureau said that new durable goods orders rose 4.0 percent in March, increasing for just the third time in the past eight months. Strong defense and nondefense aircraft orders helped to push the headline index higher, and motor vehicle sales also rebounded from recent weaknesses. Note that aircraft sales are often bulked together in batches, making them more volatile from month-to-month. As a whole, transportation equipment orders jumped 13.5 percent in March.
Excluding transportation, the news was less encouraging, with durable goods down 0.2 percent. Indeed, durable goods orders excluding transportation have fallen from their recent peak of $169.2 billion in September to $159.9 billion in March, a drop of 5.5 percent over the past six months. To be fair, the September figure might have been an outlier, with an average of $164.6 billion for 2014 as a whole. Still, that represents a softer sales environment than we would prefer for the broader durable goods sector.
Looking specifically at the March data, computers and related products (up 11.0 percent) were the only major sector outside of transportation equipment to notch a sales gain for the month. The other segments were all negative, including communications equipment (down 5.3 percent), machinery (down 1.5 percent), electrical equipment and appliances (down 1.1 percent), fabricated metal products (down 0.4 percent), other durable goods (down 0.3 percent) and primary metals (down 0.2 percent).
Meanwhile, durable goods shipments increased by 1.1 percent in March, growing for the first time in three months. Similar to new orders, however, shipments fell 0.3 percent when transportation equipment shipments were excluded. On a year-over-year basis, durable goods shipments have risen modestly, up 3.7 percent, but over the past six months, they have been essentially flat (up 0.1 percent). In March, there were increased shipments for transportation equipment (up 4.3 percent, including a 5.4 percent gain for motor vehicles) and computers and electronics products (up 1.6 percent). Other major sectors had declines.
Chad Moutray is the chief economist, National Association of Manufacturers.
The post Strong Auto and Aircraft Orders Mask Softness in Broader Durable Goods Sales in March appeared first on Shopfloor.
