US durable goods orders rise 1.6% in June, mostly on aircraft sales

26 July 2012 14:29  [Source: ICIS news]

WASHINGTON (ICIS)--New orders for US durable goods rose by 1.6% in June from May, the Commerce Department said on Thursday, but the advance was wholly attributed to civilian and military aircraft sales while other durables fell by 1.1%.

The June advance followed an upwardly revised 1.6% gain in May, the second straight month of improvement. The May improvement ended a two-month slide in overall durable goods orders.

However, as with the June results, May’s gain was due almost exclusively to military and civilian aircraft orders while the broad range of other manufactured products saw sales decline.

In its monthly report, the department said sales of durable goods in June rose by $3.4bn (€2.8bn) to $221.6bn.

In the transportation sector, new orders for military aircraft and parts shot up by nearly 24%, and new orders for civilian airliners rose by 14.3%.

In the motor vehicles and parts segment of transportation goods, new orders were off by 0.6%, the department said.

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

Consequently, economists typically look to durable goods sales minus transportation equipment to get a better sense of the so-called core of US manufacturing. 

With transportation orders backed out of the overall totals, durable goods orders in June fell by 1.1%, 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.

Within durable goods other than transportation equipment, orders for new machinery were down by 1.1% in June, the department said. 

A decline in that category typically raises concerns among economists who see a downturn in machinery orders a sign that manufacturers are uncertain about the nation’s recovery and are holding back on purchasing new production equipment.

The department noted that unfilled orders for durable goods rose by $3.7bn or 0.4% in June from May to $988.6bn, the 29th monthly gain in the last 30 months.

Inventories of manufactured but unsold manufactured goods rose by 0.3% in June, the department said, gaining $1.2bn to $366.7bn.

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 = €0.82)

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