Economy

Durable Goods Down 1% in May

June 26, 2014

Durable Goods, a measure of the health of the steel industry and economy, saw new orders fall 1 percent after three months of increases. Shipments, Unfilled Orders, and Inventories all increased 1 percent or less. Capital goods orders for non-defense and defense items decreased in May.

The Commerce Department’s GDP report showed a decline of 2.9 percent in the first quarter, the worst since the recession, although much of the decline was blamed on weather. Combined with the decrease in durable goods, economists are questioning whether economic growth for second quarter will be as strong as expected.

The Census Bureau press release from Wednesday read as follows:

New Orders. New orders for manufactured durable goods in May decreased $2.4 billion or 1.0 percent to $238.0 billion, the U.S. Census Bureau announced today. This decrease, down following three consecutive monthly increases, followed a 0.8 percent April increase. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders increased 0.6 percent. Transportation equipment, also down following three consecutive monthly increases, led the decrease, $2.3 billion or 3.0 percent to $74.4 billion.

Shipments. Shipments of manufactured durable goods in May, up four consecutive months, increased $0.6 billion or 0.3 percent to $238.6 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a slight April increase. Primary metals, up three consecutive months, led the increase, $0.4 billion or 1.6 percent to $27.0 billion.

Unfilled Orders. Unfilled orders for manufactured durable goods in May, up thirteen of the last fourteen months, increased $6.6 billion or 0.6 percent to $1,087.4 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.9 percent April increase. Transportation equipment, up eight of the last nine months, led the increase, $4.6 billion or 0.7 percent to $675.8 billion.

Inventories. Inventories of manufactured durable goods in May, up thirteen of the last fourteen months, increased $3.8 billion or 1.0 percent to $397.8 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.3 percent April increase. Transportation equipment, also up thirteen of the last fourteen months, led the increase, $1.4 billion or 1.1 percent to $127.8 billion.

Capital Goods. Nondefense new orders for capital goods in May decreased $0.4 billion or 0.5 percent to $82.1 billion. Shipments decreased $0.5 billion or 0.7 percent to $75.9 billion. Unfilled orders increased $6.2 billion or 0.9 percent to $662.7 billion. Inventories increased $2.5 billion or 1.4 percent to $181.7 billion. Defense new orders for capital goods in May decreased $4.0 billion or 31.4 percent to $8.8 billion. Shipments decreased $0.2 billion or 2.3 percent to $9.4 billion. Unfilled orders decreased $0.6 billion or 0.4 percent to $158.9 billion. Inventories increased slightly or 0.1 percent to $23.6 billion.

Revised April Data. Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $500.3 billion (revised from $499.8 billion); shipments, $497.9 billion (revised from $497.6 billion); unfilled orders, $1,080.8 billion (revised from $1,080.6 billion); and total inventories $646.1 billion (revised from $645.8 billion).

If you look at the interactive graphic we provide to our members you can clearly see the trend for Durable Goods has been higher for a number of months. This is a net positive for the steel industry. You can see the interactive graph below if you are logged into the website when reading this article. If you need assistance in getting into the website or how to work our graphics please contact us at: info@SteelMarketUpdate.com or by phone: 800-432-3475.

{amchart id=”119″ Durable Goods Shipments and New Orders 3MMA}