Economy

Durable Goods Orders Increase 2.6% on Aircraft Contracts

April 26, 2018

Orders for durable goods, manufactured items expected to last three years or more, jumped 2.6 percent in March primarily driven by new contracts for Boeing airplanes. Orders for commercial aircraft and parts leapt 44.5 percent for the month, said the Commerce Department on Thursday. Excluding the volatile transportation category, new orders were flat for the month.

Core capital goods, orders stripped of defense and aircraft, fell 0.1 percent after a 0.9 percent increase in February. It was the third time in four months that core capital goods fell, causing some economists to worry about future business investment, especially in light of recent tax reform.

“We still expect investment growth to pick up over the rest of the year as tax cuts boost domestic demand and capacity constraints bite,” said Michael Pearce, senior U.S. economist at Capital Economics.

Orders for machinery fell 1.7 percent in March, while orders for primary metals, such as steel, increased 1.4 percent.

The March advance report on manufacturers’ shipments, inventories, and orders follows:

New Orders

New orders for manufactured durable goods in March increased $6.4 billion or 2.6 percent to $254.9 billion, the U.S. Census Bureau announced today. This increase, up four of the last five months, followed a 3.5 percent February increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders increased 2.8 percent. Transportation equipment, also up four of the last five months, drove the increase by $6.4 billion or 7.6 percent to $91.4 billion.

Shipments

Shipments of manufactured durable goods in March, up 10 of the last 11 months, increased $0.7 billion or 0.3 percent to $250.0 billion. This followed a 0.7 percent February increase. Transportation equipment, up four of the last five months, drove the increase by $1.5 billion or 1.8 percent to $83.4 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in March, up six of the last seven months, increased $9.3 billion or 0.8 percent to $1,154.0 billion. This followed a 0.3 percent February increase. Transportation equipment, up three of the last four months, led the increase by $8.0 billion or 1.0 percent to $782.8 billion.

Inventories

Inventories of manufactured durable goods in March, up 20 of the last 21 months, increased by $0.3 billion or 0.1 percent to $411.0 billion. This followed a 0.4 percent February increase. Both fabricated metal products and machinery led the increase. Fabricated metal products, up 15 consecutive months, increased by $0.3 billion or 0.6 percent to $52.0 billion. Machinery, up four of the last five months, increased by $0.3 billion or 0.4 percent to $70.8 billion.

Capital Goods

Nondefense new orders for capital goods in March increased $4.7 billion or 6.0 percent to $83.1 billion. Shipments increased $1.7 billion or 2.2 percent to $76.9 billion. Unfilled orders increased $6.3 billion or 0.9 percent to $716.1 billion. Inventories decreased $0.5 billion or 0.3 percent to $182.5 billion. Defense new orders for capital goods in March increased $0.1 billion or 0.9 percent to $10.6 billion. Shipments decreased $0.3 billion or 2.7 percent to $10.6 billion. Unfilled orders increased less than $0.1 billion and were virtually unchanged to $140.7 billion. Inventories also increased less than $0.1 billion or 0.2 percent to $23.3 billion.

Revised February Data

Revised seasonally adjusted February figures for all manufacturing industries were: new orders, $499.3 billion (revised from $498.0 billion); shipments, $500.0 billion (revised from $500.5 billion); unfilled orders, $1,144.7 billion (revised from $1,142.8 billion); and total inventories, $675.1 billion (revised from $675.2 billion).