US durable goods orders fall 2.1% in June

27 July 2011 14:40  [Source: ICIS news]

WASHINGTON (ICIS)--New orders for US durable goods fell by 2.1% in June from May, the Department of Commerce (DOC) said on Wednesday, a decline that wiped out May’s 1.9% gain and added to concerns about the US economic recovery.

In its monthly report, the department said that new orders for durable goods fell by $4bn (€2.8bn) to $192bn, the second monthly decline in three months.  Durable goods orders had fallen by a revised 2.7% in April.

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.

Much of the June fall-off was attributed to sharp declines in new orders for civilian aircraft (down 29%) and for military airplanes (down 20.5%).

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

With aviation orders backed out of the total, new orders for durable goods rose just barely in June by 0.1%.

The department also said that unfilled orders for manufactured durable goods rose marginally by $2.1bn in June to $862.7bn, a 0.2% gain.  That followed a 0.9% increase in May.  

But within that category, unfilled orders for machinery jumped a full 2%.  A backlog of orders for machinery suggests that manufacturers of consumer goods could be gearing up for increased demand.

However, inventories of manufactured but unsold durable goods also rose in June, the department said, indicating that producers’ output was exceeding sales.

Inventories rose by 0.4% or $1.6bn to $357.2bn last month, which the department said was the highest level recorded since the data series was initiated in its current form.

The June increase in inventories followed a 1.2% gain in May.

US durable goods orders and inventories*


June          (bn $)

June vs May   (%)

May vs Apr (r) (%)

New orders




Unfilled orders




Total inventories




r: revised  *seasonally adjusted

($1 = €0.70)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

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