News Column

Durable Goods Down in March

April 24, 2013
Durable Goods

U.S. durable goods orders dropped 5.7 percent in March, marking the second downturn in the past three months, the U.S. Commerce Department said Wednesday.

Factory orders dropped to $216.3 billion, down by $13.1 billion after a 4.3 percent increase in February, which was previously reported as a 5.7 percent gain.

Excluding transportation equipment, factory orders for goods expected to last at least three years fell 1.4 percent. Excluding defense orders, new business for factories dropped 4.7 percent, the Commerce Department said.

Transportation orders, which have been see-sawing up and down for seven months, pulled back, dropping by 15 percent or $11 billion to $62.4 billion.

Among transportation orders, non-defense aircraft and parts lead the decline with a drop of $8.5 billion in new orders.

Durable goods inventories, up for 17 of the past 18 months, rose slightly to $377.2 billion. Shipments, up six of the past seven months, rose 0.4 percent to $230 billion.

New orders for capital goods in March fell by 10.6 percent or $8.3 billion to $70.2 billion.

Capital goods is considered a leading indicator, as it measures how much businesses are investing in themselves for items such as printing presses, tool and die presses, backhoes and other equipment. If business managers sense a downturn ahead, they hesitate to invest in new equipment.

For the month transportation orders "drove the increase" with a gain of $13.3 billion, or 21.7 percent, in new orders, which totaled $74.4 billion.

Orders for non-defense-related capital goods rose 10 percent to $80.8 billion, the largest increase in five months.

"Capital goods" is a category of investment into production equipment, such as printing presses, backhoes and computers -- equipment that represents businesses investing in themselves. It is seen as a gauge of confidence among producers.

Shipments of durable goods, up five of the past six months, also rose in February, rising by 1 percent or $2.2 billion to $229.3 billion, the Commerce Department said.

Source: Copyright UPI 2013. Distributed by MCT Information Services

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