US durable goods orders for March off 4.2% in broad-based decline

25 April 2012 14:57  [Source: ICIS news]

Cars are durable goodsWASHINGTON (ICIS)--US orders for manufactured durable goods fell by 4.2% in March from February, the Commerce Department said on Wednesday, and the second decline in three months was broad-based throughout production sectors.

In its monthly report, the department said that new orders for durable goods last month were at $202.6bn (€154bn), down by $8.8bn or 4.2% from February.

The department also lowered its estimate for February’s gain to 1.9% from its earlier measure of a 2.2% increase over January’s level.  January had seen a 3.6% drop from December.

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.

The March decline in new orders was broad-based, the department said, with only a few non-defence manufacturing sectors showing improvement, including communications gear and electronic equipment.

Federal government spending on warplanes and other military equipment rose by as much as 15% last month, but that gain was not enough to offset the broader downturn in manufacturing orders.

The heaviest decline was in transportation equipment, which fell by 12.5% in March from the month prior, including a 47.6% decrease in new orders for civilian 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.

Consequently, economists usually look to durable goods orders minus transportation to get a more balanced picture of the nation’s manufacturing sector.

However, even with the sharp decline in transportation equipment backed out of the figures, new orders for durable goods were down by 1.1% in March, the department said.

The report said that unfilled orders for manufactured durable goods in March were essentially flat, rising to $930.135bn from February’s $930.116bn, a statistically insignificant gain of $19m.

The data on unfilled orders has seen increases in 23 of the past 24 months.

Inventories of produced but unsold durable goods rose by $1.7bn or 0.4% in March from February to $375.1bn, the department said, the 27th consecutive monthly advance.

US durable goods orders and inventories*

 

  Mar          (bn $)

Mar vs Feb (%)

Feb vs Jan (r) (%)

New orders

202.6

-4.2

1.9

Unfilled orders

930.1

0

1.2

Total inventories

375.1

0.4

0.3

r: revised  *seasonally adjusted

($1 = €0.76)

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


By: Joe Kamalick
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