Advanced Durable Goods Orders: The U.S. Census Bureau reported that new orders for durable goods orders increased by 0.4% month on month, (m/m) in August, following the 11.7% increase in July. The always-volatile nondefense aircraft orders, down 137.9% y/y influenced this trend significantly.

The Advance Report on Durable Goods (DG), The M3 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 increased by 5.6% for the month and down 13.9% on a year on year, (y/y) basis. Transportation orders increased by 0.5% and were down 27.3% vs a year ago. Leaving out transportation business, orders increased 0.4% m/m and decreased 12.3%y/y.

Motor vehicles and parts were down 4.0% m/m as orders decrease 18.9% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were up 1.2% m/m and have decreased 10.1% y/y.

Durable goods shipments decreased 0.3% m/m and were lower by 11.3% on a year on year comparison.  Capital goods shipments increased by 2.7% m/m and down 6.6% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $232.8M in August (3MMA), an 11.3% decrease y/y.

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