US durable goods off again in March, reversing Feb gains

24 April 2009 15:15  [Source: ICIS news]

WASHINGTON (ICIS news)--New orders for US durable goods in March fell by $1.3bn (€988m), or 0.8%, from February to $161.2bn, the Commerce Department said on Friday, indicating that the 2.1% increase reported for February has not been sustained.

The March drop in durable goods orders marked the seventh decline in the last eight months.

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 manufactured durable goods also turned down again in March, the department said, falling by $11.2bn, or 1.4%, from February to $760.3bn. 

The March decline in unfilled orders followed a 1.6% drop in February and suggested that consumers of manufactured goods were still in retrenchment and not yet ready to begin ordering anew.

However, manufacturers continue to reduce their supplies of finished but unsold products, with the department reporting that inventories of manufactured goods fell by $3.7bn, or 1.1%, in March to $331.6bn.

This followed a 1.3% decline in February and marks the third consecutive month of inventory reductions across the manufacturing sector.

Transportation equipment continued to be the hardest hit sector, with the department reporting sales down by the largest percentage, 1.4%, in a decline of $500m to $37.9bn in March. 

Declines in production of manufactured transportation equipment were due almost wholly to the ongoing slump in US automobile production – another key downstream market for chemicals and resins – which saw new orders fall by 1.7% in March.

In contrast, March saw a 4.4% gain in orders for civilian aircraft and parts, and a 4.7% jump in military aviation orders.

If transportation data were to be backed out of the overall numbers, new orders for durable goods fell by 0.6% in March, the department said.

US durable goods orders and inventories*

	Mar           (bn $)	Mar v Feb          (%)	Feb v Jan (r)              (%)
New orders	161.2	-0.8	2.1
Unfilled orders	760.3	-1.4	-1.6
Total inventories	331.6	-1.1	-1.3

r: revised  *seasonally adjusted

($1 = €0.76)

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