US durable goods June orders rise for 2nd month

25 July 2008 17:59  [Source: ICIS news]

WASHINGTON (ICIS news)--New orders for US durable goods increased by $1.6bn (€1bn) or 0.8% to $215.4bn in June, the Commerce Department said on Friday, marking the second consecutive monthly gain although largely on the strength of defence spending.

 

New orders for durable goods were up by a slim 0.1% in May but had marked the first positive number in this crucial manufacturing measure in three months.

 

In its monthly report on durable goods manufacturing, the department said that June’s new orders for manufactured durable goods excluding transportation equipment were up more sharply by 2%. 

 

The transportation sector includes civilian aircraft orders, which often are made in multiple-plane purchases and in any given month those orders - or their lack - can affect manufacturing data disproportionately.

 

However, the overall gain in durable goods appeared closely tied to military and related equipment. Excluding defence spending for durable goods, the overall gain in June was only 0.1%.

 

Durable goods are manufactured products meant to last three years or more and include such items as automobiles, appliances, transportation and manufacturing equipment. Many durable goods, such as computers and automobiles, are major downstream markets for chemicals and chemicals-based products used in manufacturing processes or as end-product components.

 

Unfilled orders for durable goods increased $7.2bn or 0.9% to $817.6bn in June, the department said. This was the highest level since the data series was started in 1992 and followed a 0.9% May increase. Unfilled orders have shown increases in 28 of the last 29 months, the department added.

 

Durable goods inventories rose by $1.8bn or 0.5% to $332.2bn in June, the department said, also the highest level since the series was initiated in 1992.  Inventories have seen increases in 11 of the last 12 months.  June’s increase followed a 0.5% gain in May.

 

US durable goods orders and inventories*

	June           (bn $)	June vs May          (%)	May vs April (r)              (%)
New orders	215.4	0.8	0.1
Unfilled orders	817.6	0.9	0.9
Total inventories	332.2	0.5	0.5

r: revised  *seasonally adjusted

($1 = €.65)

 

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By: Joe Kamalick
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