US durable goods output fell in Jan for 6th month

26 February 2009 15:07  [Source: ICIS news]

WASHINGTON (ICIS news)--New orders for US durable goods plummeted by $9bn (€7bn) or 5.2% to $163.8bn in January, the Commerce Department said on Thursday, marking the sixth straight month of declines for the nation’s core industrial output.

The decline was led by an even sharper downturn in transportation equipment, which fell by $5.7bn or 13.5% to $36.7bn for the month.

January’s sharp fall in durable goods output indicated an accelerated decline following the 4.6% drop recorded for December.

Durable goods are manufactured products meant to last three years or more and include such items as automobiles, appliances and 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.

Within transportation, the 13.5% decline was attributed chiefly to a sharp 28% fall in new orders for military aircraft and parts and a 6.4% slide in new orders for automobiles and related parts.

In its monthly report, the department said that unfilled orders also continued a downward trend in January, falling by $15.3bn or 1.9% to $785bn, marking the fourth consecutive month of decline. 

Here too the fall-off was attributed chiefly to a decline in transportation equipment.

However, the department noted that inventories of manufactured durable goods decreased by $2.8bn or 0.8% to $340.7bn in January, the first decline in this data series in 16 months.

Inventories had been increasing for nearly a year-and-a-half, a sign that manufacturers were having ongoing difficulty in selling goods that they produced. 

While one month’s data set does not necessarily signal a turnaround, January’s slight decline in inventories may suggest that producers are beginning to work through their excess supplies.

US durable goods orders and inventories*

 

     Jan           (bn $)

   Jan vs Dec          (%)

    Dec vs Nov (r)              (%)

New orders

163.8

-5.2

-4.6

Unfilled orders

785

-1.9

-1.5

Total inventories

340.7

-0.8

0.4

r: revised  *seasonally adjusted

($1 = €0.78)

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By: Joe Kamalick
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