The Census Bureau reported that durable goods orders were up 0.7 percent in November, edging slightly higher for the third straight month. Even with these increases, however, it is important to note that the pace of new orders remains below its peak in July, when durable goods sales were $228.6 billion. In November, this level was $220.9, representing a 3.3 percent decline. This puts a slightly different spin on the otherwise positive news, as it shows how activity has been more sluggish in the second half of 2012 for durable goods industries than earlier in the year.

Regarding November’s figures, improvements were fairly broad-based outside of the transportation sector. New orders in transportation were down 1.1 percent, with steep declines in aerospace sales (defense down 12.3 percent, nondefense down 13.9 percent). Motor vehicle orders were up 3.5 percent.

Excluding transportation, new durable goods orders would have risen 1.6 percent. Behind these gains were higher new orders in the following sectors: machinery (up 3.3 percent), computers (up 3.1 percent), primary metals (up 2.4 percent), fabricated metal products (up 1.9 percent), electrical equipment and appliances (up 1.8 percent), and communications equipment (up 0.9 percent).

Meanwhile, shipments of durable goods rose 1.5 percent, building on much smaller gains from the two previous months. Even with these gains, shipments remain 0.9 percent below what was seen in July, mirroring the peak seen in new orders described above. Shipments were up across-the-board, with the only areas of weakness found in the communications equipment sector.

 

Chad Moutray is the chief economist, National Association of Manufacturers.

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