Economy

Durable Goods Orders Drop 1.1 Percent in September
Written by Sandy Williams
October 24, 2019
Durable goods orders fell by the greatest amount since May, dropping 1.1 percent in September, significantly more than analysts’ estimates of a 0.8 percent decline. Core capital goods, non-defense minus aircraft and a proxy for business investment, fell 0.5 percent.
The latest Census Bureau report indicates further weakness in the manufacturing sector. Continued uncertainty regarding trade and the domestic and global economy has stifled growth in the U.S. and abroad.
“With the survey-based manufacturing orders indices from the ISM and Markit at depressed levels and CEO confidence also slumping, there are plenty of reasons to believe that equipment investment will contract again in the fourth quarter,” wrote U.S. economist Paul Ashworth at Capital Economics as quoted by Market Watch.
The September advance report on manufacturers’ shipments, inventories and orders follows:
New Orders
New orders for manufactured durable goods in September decreased $2.8 billion or 1.1 percent to $248.2 billion. This decrease, down following three consecutive monthly increases, followed a 0.3 percent August increase. Excluding transportation, new orders decreased 0.3 percent. Excluding defense, new orders decreased 1.2 percent. Transportation equipment, also down following three consecutive monthly increases, led the decrease by $2.3 billion or 2.7 percent to $84.5 billion.
Shipments
Shipments of manufactured durable goods in September, down three consecutive months, decreased $1.0 billion or 0.4 percent to $252.5 billion. This followed a 0.1 percent August decrease. Transportation equipment, also down three consecutive months, drove the decrease by $1.0 billion or 1.2 percent to $84.6 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in September, down following two consecutive monthly increases, decreased less than $0.1 billion or were virtually unchanged to $1,163.5 billion. This followed a 0.2 percent August increase. Fabricated metal products, down following three consecutive monthly increases, drove the decrease by $0.1 billion or 0.1 percent to $87.0 billion.
Inventories
Inventories of manufactured durable goods in September, up 14 of the last 15 months, increased $2.1 billion or 0.5 percent to $430.3 billion. This followed a 0.2 percent August increase. Transportation equipment, also up 14 of the last 15 months, led the increase by $2.1 billion or 1.4 percent to $145.3 billion.
Capital Goods
Nondefense new orders for capital goods in September decreased $2.1 billion or 2.8 percent to $71.6 billion. Shipments decreased $0.1 billion or 0.1 percent to $74.2 billion. Unfilled orders decreased $2.6 billion or 0.4 percent to $690.4 billion. Inventories increased $1.8 billion or 0.9 percent to $194.5 billion. Defense new orders for capital goods in September decreased $0.6 billion or 4.5 percent to $13.2 billion. Shipments increased $0.2 billion or 1.4 percent to $12.8 billion. Unfilled orders increased $0.4 billion or 0.2 percent to $157.5 billion. Inventories increased $0.2 billion or 1.0 percent to $24.0 billion.
Revised August Data
Revised seasonally adjusted August figures for all manufacturing industries were: new orders, $500.0 billion (revised from $499.8 billion); shipments, $502.5 billion (revised from $503.0 billion); unfilled orders, $1,163.6 billion (revised from $1,162.9 billion); and total inventories, $695.8 billion (revised from $695.9 billion).

Sandy Williams
Read more from Sandy WilliamsLatest in Economy

Architecture firms struggle through April
For the third month in a row, architecture firms reported a reduction in billings through April, according to the latest Architecture Billings Index release.

House committee blocks GOP budget proposal
The budget proposal has big implications for steel and manufacturing.

Manufacturing in New York state contracts again in May
Manufacturing activity in New York state declined for the third consecutive month, according to the May Empire State Manufacturing Survey from the Federal Reserve Bank of New York. Responding firms continue to forecast weaker business conditions in the coming months.

Chicago Business Barometer falls back in April, remains in contraction
The Chicago Business Barometer declined in April, reversing March’s gains, according to Market News International (MNI) and the Institute for Supply Management (ISM).

Fewer manufacturers optimistic about the economy
PMA’s April report shows that only 16% of surveyed manufacturers anticipate an increase in economic activity in the next three months (down from 23% in March)