US durable goods orders up by 9.9% in Sep on huge aircraft gains

25 October 2012 14:29  [Source: ICIS news]

WASHINGTON (ICIS)--US orders for manufactured durable goods rose by 9.9% in September from August, the Commerce Department said on Thursday, with most of that advance attributed to a sharp, multi-fold increase in civilian aircraft orders.

In its monthly report, the department said that overall durable goods orders rose last month by $19.6bn (€15.1bn) to $218.2bn. That nearly 10% advance largely offset the 13% decrease recorded in August.

Almost the entire September advance was laid to a seemingly remarkable 26-fold (2,640%) increase in orders for civilian aircraft and parts.

But that breathtaking gain was more a measure of August’s weak aircraft sales than September’s increase.

Monthly sales of civilian aircraft and parts often are in the range of $15bn-20bn. But in August those orders were at an unusually low level of $535m. The return of aircraft orders to $14.6bn in September produced the statistically large gain.

As the August-September data so vividly demonstrate, 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 usually look to durable goods orders minus transportation to get a more balanced picture of the nation’s manufacturing sector.

With aircraft and other transportation categories backed out of the total, new orders for durable goods saw a comfortable 2% advance in September from August.

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 department’s report also noted that unfilled orders for durable goods rose by $1.6bn or 0.2% last month to $980.8bn and followed a 1.7% decline in August. 

Here too, the unusual aircraft orders bubble was prominent. With the $4.9bn gain in unfilled orders for those transportation items backed out, the unfilled orders category would have shown a decline.

Inventories of manufactured but unsold goods rose by $900m or 0.3% in September to $372.9bn and followed a 0.6% gain in August.

US durable goods orders and inventories*

 

  Sep (bn $)

Sep vs Aug (%)

Aug vs July (r) (%)

New orders

218.2

9.9

-13.1

Unfilled orders

980.8

0.2

-1.7

Total inventories

372.9

0.3

0.6

r: revised  *seasonally adjusted

($1 = €0.77)

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


By: Joe Kamalick
+1 713 525 2653



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