Economy
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).
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
US construction spending levels off in March
Construction spending in the US in March was basically steady from the previous month but showed notable year-on-year (y/y) growth.
ISM: Manufacturing sector contracted in April
The Index had briefly showed expansion in March, but has indicated a contracting manufacturing sector for 17 of the last 18 months.
Chicago Business Barometer falls to 16-month low
The Chicago Business Barometer slipped further in April, now at the lowest measure recorded since November 2022.
Leading nonres indicator falls to more than three-year low
An important economic indicator for the nonresidential construction industry declined in March to its lowest point in more than three years.
Fed Beige Book: Economy improves, but manufacturing weak
While general economic conditions across the US improved slightly over the last six weeks, activity in the manufacturing sector was weak, according to the Fed’s latest Beige Book report.