US durable goods orders rise 2.7% in January on aircraft sales

24 February 2011 15:22 [Source: ICIS news]

HOUSTON (ICIS)--New orders for US durable goods increased in January from December by $5.3bn (€3.9bn), or 2.7% to $200.5bn, the Department of Commerce said on Thursday, snapping a string of three consecutive monthly declines.

The January increase was largely a result of a 27.6% increase in transportation equipment spending to $10.9bn, led by a $7.3bn surge in new orders for non-defence aircraft and parts.

Aircraft orders are often made in multiple-plane purchases and in any given month those commitments - or their lack - can affect manufacturing data disproportionately.

With transportation backed out of the total, new orders for durable goods fell by 3.6% from December, the department said.

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 derivatives used in manufacturing processes or as end-product components.

In its monthly report, the department said that unfilled orders for durable goods gained by $4.3bn, or 0.5%, to $829.4bn. That reversed a 0.2% decrease in December, which marked the first decline in eight months.

Inventories of manufactured but unsold goods rose by $2.2bn, or 0.7% in January to $324.8bn, according to the report.

The department said that inventories have been gaining for the past 13 months.

The 13-month-long increase in inventories of unsold goods suggests to some economists that the recovery in the US manufacturing sector may be slowing.

US durable goods orders and inventories*

Jan (bn $)

Jan vs Dec (%)

Dec vs Nov (%)

New orders

200.5

2.7

-2.5

Unfilled orders

829.4

0.5

-0.4

Total inventories

324.8

0.7

0.7

*seasonally adjusted

Additional reporting by Joe Kamalick

($1 = €0.73)

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