Advanced Durable Goods Orders

Advanced Durable Goods Orders: The U.S. Census Bureau reported that new orders for durable goods increased by 3.4% month-on-month (m/m) in January 2021, totaling $256.5M. This represents a 4.1% increase y/y. The always-volatile nondefense aircraft orders, down 59.7% 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 8.5% for the month and are up 11.6% on a y/y basis. Transportation orders increased by 7.8% and were up 0.1% vs a year ago. Leaving out transportation business, orders increased 1.4% m/m and increased 6.6% y/y.

Motor vehicles and parts were down 0.8% m/m as orders increased 3.0% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were up 3.2% m/m and have increased 4.1% y/y.

Durable goods shipments increased 2.0% m/m and are up by 3.5% on a year-on-year comparison. Capital goods shipments increased by 3.4% m/m but are down 7.4% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $256.5M in January 2021, a 4.1% increase 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.

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