Could it be that we are finally getting some good news in manufacturing? Once again, official government statistics digress from the regional surveys, much as we saw with last week’s industrial production figures from the Federal Reserve Board. Today’s news comes from the Census Bureau in the Durable Goods Report.
Orders for new durable goods rose 4 percent in July, according to advanced numbers from Census (All rates of growth are in annual terms). This reverses the decline in June. The large increase, though, was largely due to significant rises in new sales of motor vehicles (up 11.5 percent) and nondefense aircraft (up 43.4 percent).
Excluding the transportation sector, new durable goods orders rose 0.7 percent. Other major sectors had mixed results, with gains in primary metals (up 10.3 percent) and capital goods (up 1.3 percent) being offset by declines in computers and electronic products (down 3.4 percent), electronics and appliances (down 1.8 percent) and machinery (down 1.5 percent).
Manufacturers’ shipments were up 2.5 percent, stronger than the two previous months (which were also positive). Meanwhile, both unfilled orders and inventories also rose, up 0.7 percent and 0.8 percent, respectively. Again, these numbers were led by the transportation sector, including automobiles and aircraft.
Overall, these numbers are positive news for the durable goods sector, with rebounded sales of motor vehicles being a sign that that industry is recovering. With that said, the larger picture for durable goods is mixed, and it would have been nice to see stronger growth across-the-board. So, even in this good news, there are signs which are less encouraging.
Chad Moutray is chief economist, National Association of Manufacturers.