Durable Goods Rise on Transportation Orders, But Lower Otherwise

By August 24, 2012Economy

The Census Bureau reported that new durable goods orders rose 4.2 percent in July, its largest gain of the year. This increase was led by a sharp rise in new orders for transportation equipment (up 14.1 percent), primarily among motor vehicles and nondefense aircraft. If you were to exclude transportation, new orders would have fallen by 0.4 percent. Similarly, sales of core capital goods, or nondefense capital goods excluding aircraft, fell 3.4 percent.

These numbers suggest broader weaknesses for manufacturers outside of autos and commercial airplanes. For example, defense aircraft (down 8.5 percent), communications equipment (down 4 percent), machinery (down 3.6 percent), and electrical equipment and appliances (down 2.1 percent) suffered losses in new orders. There were some sectors with positive new orders, including computers (up 3.7 percent) and primary metals (up 2.7 percent).

Meanwhile, shipments increased 2.6 percent in July, an improvement over being unchanged in June. For the most part, the story for shipments mirrors the one for new orders, with transportation leading the gain. If transportation equipment shipments were excluded, the increase was just 0.3 percent.

Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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