The Census Bureau reported this morning that durable goods orders rose 1.9 percent in May, rebounding slightly from its 2.7 percent decline in April. The largest mover in this data was the transportation sector, which had been hard hit in previous months due to supply chain disruptions and was up 5.8 percent in May. Excluding transportation, new orders were up 0.6 percent.
Overall, these numbers show that manufacturing is starting to get back on track to where they were before the Japanese disaster, with durables helping to lead the recovery.
In addition to stronger numbers in transportation, other manufacturing sectors also experienced healthy increases in new orders in May. These include capital goods (up 5.6 percent); communications equipment (3.6 percent); electrical equipment, appliances, and components (up 3.2 percent); primary metals (up 1.8 percent); computers and related products (up 1.3 percent); and machinery (up 1.2 percent).
In addition to new orders, shipments, unfilled orders, and inventories were also up (0.3 percent, 0.9 percent, and 1.2 percent, respectively). Computers and related products and machinery were the two sectors that boasted the largest increases in both shipments and unfilled orders for the month.
In related news, the Bureau of Economic Analysis today revised its numbers for first quarter 2011 real gross domestic product. Real GDP is now said that have grown 1.9 percent, up from 1.8 percent as reported earlier.
Output growth was led by healthy increases in personal consumption, fixed investment (excluding nonresidential structures), and exports. Durable goods consumption, for instance, grew 9.3 percent from the previous quarter, and exports increased 7.6 percent. However, decreases in government spending and strong import growth offset some of these gains.
Chad Moutray is chief economist, National Association of Manufacturers.