U.S. Durable Goods Orders Up Slightly

June 25, 2008
First increase in three months

New orders for manufactured durable goods in May increased slightly to $213.6 billion, the U.S. Census Bureau announced June 25. This was the first increase in three months and followed a 1% April decrease.

Excluding transportation, new orders decreased 0.9%. Excluding defense, new orders decreased 0.6%.

"The May report on new orders for big-ticket manufacturing items reflects the persistent weakness of the current modest manufacturing downturn," said Cliff Waldman, Economist for the Manufacturers Alliance/MAPI. "Excluding the volatile transportation category, total new orders fell modestly after two relatively strong months. The industry data continue the pattern of the past two quarters. Machinery demand has been unusually volatile and the primary metals and fabricated metals products industries, hampered by housing and industrial uncertainty, continue to show volatile and lackluster demand.

"Further, the structural problems in the motor vehicle industry have been significantly exacerbated by skyrocketing gas prices, adding to the overall weakness in the factory sector," he added. "New orders for nondefense capital goods, excluding aircraft, a proxy for business equipment spending, continue to show a sluggish and uncertain pattern of demand hampered by housing, credit, and global inflation difficulties that has made business expansion decisions both difficult and risky."

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