Economy
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Orders for Durable Goods Rebound in May
Written by Sandy Williams
June 24, 2021
Orders for manufactured durable goods rebounded in May after a surprise tumble of 0.8% (revised) in April. Orders rose 2.3 percent to $253.3 billion, reported the U.S. Census Bureau.
Transportation led the increase after falling in April due to the semiconductor shortage that stalled auto production. Transportation jumped 7.6%, more than reversing April’s revised decline of 6.6%. Motor vehicle orders were up 2.1% after an 8.1% plummet the previous month. Nondefense aircraft orders remained strong with a 27.4% increase.
Core capital goods orders–orders excluding defense and transportation and considered an indicator for business investment–dipped 0.1% after an upwardly revised 2.7% gain in April.
“Manufacturing is in good health,” said Ian Shepherdson of Pantheon Macroeconomics. “Surveys suggest that activity in the sector is no longer accelerating, but growth is strong.”
In a separate report on Thursday, the U.S. Bureau of Economic Analysis said real gross domestic product (GDP) increased at an annual rate of 6.4% in the first quarter of 2021. GDP rose 4.3% during the fourth quarter of 2020.
The Census Bureau’s May 2021 advance report on durable goods manufacturers’ shipments, inventories and orders follows:
New Orders
New orders for manufactured durable goods in May increased $5.7 billion or 2.3 percent to $253.3 billion. This increase, up 12 of the last 13 months, followed a 0.8 percent April decrease. Excluding transportation, new orders increased 0.3 percent. Excluding defense, new orders increased 1.7 percent. Transportation equipment, up following two consecutive monthly decreases, led the increase by $5.2 billion or 7.6 percent to $74.2 billion.
Shipments
Shipments of manufactured durable goods in May, up two of the last three months, increased $1.0 billion or 0.4 percent to $248.3 billion. This followed a virtually unchanged April decrease. Machinery, up seven of the last eight months, led the increase by $0.4 billion or 1.1 percent to $35.1 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in May, up four consecutive months, increased $9.5 billion or 0.8 percent to $1,209.3 billion. This followed a 0.4 percent April increase. Transportation equipment, up three of the last four months, led the increase by $3.1 billion or 0.4 percent to $806.2 billion.
Inventories
Inventories of manufactured durable goods in May, up four consecutive months, increased $2.9 billion or 0.7 percent to $445.3 billion. This followed a 0.7 percent April increase. Primary metals, up 10 consecutive months, led the increase by $0.9 billion or 2.4 percent to $38.5 billion.
Capital Goods
Nondefense new orders for capital goods in May increased $2.2 billion or 2.7 percent to $83.6 billion. Shipments decreased $0.5 billion or 0.7 percent to $77.7 billion. Unfilled orders increased $5.9 billion or 0.8 percent to $729.8 billion. Inventories increased $0.7 billion or 0.4 percent to $197.3 billion.
Defense new orders for capital goods in May increased $1.6 billion or 17.4 percent to $10.7 billion. Shipments decreased $0.3 billion or 2.6 percent to $11.9 billion. Unfilled orders decreased $1.3 billion or 0.7 percent to $190.6 billion. Inventories decreased less than $0.1 billion or 0.1 percent to $20.9 billion.
Revised April Data
Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $487.3 billion (revised from $485.2 billion); shipments, $487.1 billion (revised from $487.8 billion); unfilled orders, $1,199.8 billion (revised from $1,196.9 billion) and total inventories, $725.0 billion (revised from $723.6 billion).
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Sandy Williams
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