US durable goods orders fall in Oct, fourth decline in five months

23 November 2011 14:23  [Source: ICIS news]

WASHINGTON (ICIS)--New orders for US durable goods fell by 0.7% in October from September, the Commerce Department said on Wednesday, marking the second consecutive monthly decline and the fourth monthly fall-off in the past five months.

In its monthly report, the department said that new orders for durable goods fell by $1.4bn (€1bn) last month to $197.7bn and followed the downwardly revised September drop of 1.5% (originally reported as a 0.8% decline).

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

While the overall figure for durable goods orders was down in October, the department noted that much of that decline could be attributed to a 16% drop in purchases of civilian aircraft and parts.

However, if purchases of aircraft and other transportation equipment are taken out of the total, the department said that new orders for all other durable goods rose by 0.7% in October.

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

Still, the fourth month of declines out of five months in overall orders for durable goods comes as the department has revised its estimate of US third-quarter GDP, reducing that key measure of economic activity to 2% growth from its earlier estimate of 2.5%. 

The department said that unfilled orders for manufactured durable goods rose by $1.9bn or 0.2% in October to $886bn, the 18th increase in the past 19 months. This category had seen a 0.6% rise in September.

Inventories of produced but unsold durable goods also rose in October, the department said, rising by $1.8bn or 0.5% to $367.2bn. This gain was the 22nd monthly advance and marked the highest level to date.

US durable goods orders and inventories*

 

     Oct (bn $)

Oct vs Sep   (%)

Sep vs Aug (r) (%)

New orders

197.7

-0.7

-1.5

Unfilled orders

886.0

0.2

0.6

Total inventories

367.2

0.5

0.1

r: revised  *seasonally adjusted

($1 = €0.74)

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


By: Joe Kamalick
+1 713 525 2653



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