January new orders for manufactured durable goods rose 2.7 percent over December 2010, according to data released today by the Census Bureau. Overall, the data released today indicate that the manufacturing sector is continuing the recovery that began last year.
Excluding the volatile transportation equipment sector, January new orders for durable goods were actually 3.6 percent below December. This, though, follows several months of strong growth, and should not be read as a reversal of the manufacturing recovery that has been taking place. Even with the January pause, new orders excluding transportation equipment were up 12.3 percent over January 2010 – showing continued good growth. Unfilled orders excluding transportation corroborate growth prospects, jumping 12.6 percent over the 2010 period.
New orders for transportation equipment soared 27.6 percent in January, making up for weak orders in earlier months. Even with the sharp jump in January, new orders for transportation equipment were still 2.5 percent below January 2010. Nevertheless, the transportation sector has $476 billion of unfilled orders – nearly 70 percent of which are for civilian aircraft.
Actual factory shipments of durable goods rose a slow 0.3 percent in January, and were up 5.8 percent over January 2010. The fact that new orders grew faster than shipments indicates the prospect of a pickup in shipments in the coming months.
The durable goods sector is extremely important to manufacturing, as nearly two-thirds of all manufacturing employment is in that sector. The recovery in durable goods manufacturing is resulting in job creation, with 190,000 more jobs in January 2011 than in the year-earlier period. That more than offset the 38,000 drop in non-durable employment during that same period.
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