US durable goods orders rise in Feb, ending 6-month slide

25 March 2009 14:27  [Source: ICIS news]

WASHINGTON (ICIS news)--New orders for US durable goods took an unexpected upswing in February, the Commerce Department said on Wednesday, climbing by $5.5bn (€4bn) or 3.4% compared with December to $165.6bn and ending a six-month decline.

However, the sudden gain in February’s durable goods orders was attributed chiefly to US military purchases and might not reflect a general turnaround in manufacturing.

Excluding defence-related purchases, durable goods orders rose in February by a more modest 1.7%. 

Even so, the upturn in durable goods is seen as a welcome sign after a half-year of continuing declines in this crucial economic indicator. February’s increase in orders followed a particularly sharp 7.3% decrease in January.

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.

The department said that unfilled orders for manufactured durable goods fell by 1.3% or $10.5bn to $773.7bn, marking the fifth consecutive decline for this data set and following a 2% drop in January.

Inventories of produced durable goods decreased by $2.9bn or 0.9% in February to $336.8bn, the department said.  This was the second consecutive month of decline and followed a 1.1% fall in January.

US durable goods orders and inventories*

	Feb           (bn $)	Feb vs Jan          (%)	Jan vs Dec (r)              (%)
New orders	165.6	3.4	-7.3
Unfilled orders	773.7	-1.3	-2
Total inventories	336.8	-0.9	-1.1

r: revised  *seasonally adjusted

($1 = €0.74)

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By: Joe Kamalick
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