New durable goods orders were up 3.3 percent in April, somewhat reversing the 5.9 percent decline observed in March. This data has been highly volatile so far in 2013, up one month and then down the next largely on wide swings in aircraft orders. Nonetheless, even with the gain in April, durable goods orders were $222.56 billion, down from $228.45 billion at the end of 2012. These ups and downs can clearly be seen in the chart below.

As noted, defense and nondefense aircraft orders were up significantly in April, the reverse of what was true in March. Excluding transportation orders from the analysis, new orders increased 1.3 percent, suggesting some broader strengths beyond airplanes. Some of the other sectors with higher levels of sales in April included communications equipment (up 5.7 percent), machinery (up 1.9 percent), motor vehicles (up 1.9 percent), and fabricated metal products (up 1.2 percent). The computer and related products sector was one of the few areas of weakness, down 3.7 percent.

Meanwhile, shipments of durable goods declined by 0.6 percent in April, the third decrease in the past four months.  Year-to-date, shipments have fallen 0.8 percent, reflecting some of the recent weaknesses in the manufacturing industry, both domestically and globally. Nondefense and defense aircraft shipments were both down appreciably, but even with their values excluded, durable goods shipments still fell by 0.4 percent. Other sector with decreased shipments in April included computers and electronic products (down 2.9 percent) and machinery (down 1.3 percent). In contrast, the largest gains were in the motor vehicle and parts (up 2.0 percent) and fabricated metal products (up 1.9 percent) sectors.

Chad Moutray is chief economist, National Association of Manufacturers.

 

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