Advance Durable Goods Orders: The U.S. Census Bureau reported that new orders in February 2021 for durable goods decreased by 1.1% month on month (m/m) to $254B, following the 3.5% increase in January. The always-volatile nondefense aircraft orders, down 39.1% year on year (y/y), influenced this trend significantly.

The Advance Report on Durable Goods (DG) is based upon data reported from manufacturing establishments with $500 million or more in annual shipments. Units may be divisions of diversified large companies, large homogenous companies, or single-unit manufacturers in 89 industry categories.

Capital goods orders decreased by 2.0% for the month but are up 11.0% on a y/y basis. Transportation orders decreased by 1.6% and were down 3.3% vs. a year ago. Leaving out transportation business, orders decreased 0.9% m/m but increased 7.0% y/y.

Motor vehicles and parts were down 8.7% m/m and down 0.9% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were down 0.5% m/m but have increased 5.6% y/y.

Durable goods shipments decreased 3.5% m/m but are up by 1.8% on a y/y comparison. Capital goods shipments decreased by 2.6% m/m but are up 5.2% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $254B in February 2021, a 3.4% increase y/y.

At Gerdau, we routinely monitor advanced durable goods orders since it provides a good read on the current health of the US manufacturing economy and its probable short-run future.