Advanced Durable Goods Orders: The U.S. Census Bureau reported that new orders for durable goods increased by 1.9% month on month (m/m) in September 2020, following the 0.3% increase in August. New orders totaled $237.1M in September, a 4.0% decrease y/y. The always-volatile nondefense aircraft orders, down 133.7% 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 increased by 4.7% for the month and down 12.4% on a year on year, (y/y) basis. Transportation orders increased by 4.1% and were down 25.0% vs. a year ago. Leaving out transportation business, orders increased 0.8% m/m and decreased 2.2% y/y.

Motor vehicles and parts were down 1.5% m/m as orders decreased 15.9% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were up 4.0% m/m and have decreased 9.0% y/y.

Durable goods shipments increased 0.3% m/m and were lower by 7.5% on a year on year comparison.  Capital goods shipments decreased by 0.1% m/m and down 6.0% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $237.1M in September 2020, a 4.0% 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.