• Transportation orders decline sharply for a second month.

• Orders of core capital goods reverse February decline.

• Shipments rebound while order backlogs & inventories rise.

Manufacturers' orders for durable goods rose 0.5% in March (25.0% y/y) after falling 0.9% during February due to winter storms, revised from -1.1%. A 2.4% jump had been expected in the Action Economics Forecast Survey.

Last month's disappointment owed largely to a 1.7% decline (+62.5% y/y) in transportation orders as it followed a 2.0% February weakening. A 5.5% increase (26.6% y/y) in motor vehicle & parts bookings was offset by a 38.2% falloff in aircraft & parts orders.

Orders for nondefense capital goods excluding aircraft improved 0.9% last month (11.6% y/y) as it followed a 0.8% February weakening.

In the major categories of the report, primary metals orders rose 1.2% (15.1% y/y) while fabricated metals orders strengthened 3.6% (16.6% y/y). Machinery orders rose 1.0% (9.7% y/y) while computer & electronic product orders edged 0.5% higher (10.1% y/y) following two months of decline. These increases were offset by a 1.5% falloff (+7.4% y/y) in orders for electrical equipment and appliances.

Shipments of durable goods increased 2.5% (10.0% y/y) following a 3.6% decline. Shipments of core capital goods rose 1.3% (10.4% y/y). Shipments of transportation products rebounded 4.8% (11.7% y/y) as auto and aircraft shipments improved. Shipments excluding transportation rebounded 1.5% (9.3% y/y) after and reversed February's weakening.

Unfilled orders for durable goods improved 0.4% (-3.3% y/y) last month after a 0.9% increase. Order backlogs, excluding transportation, rose 1.2% (7.7% y/y) for a second consecutive month.

Inventories of durable goods jumped 1.0% (1.7% y/y) in March, the strongest increase since July 2018. Excluding transportation, inventories increased 0.8% (0.3% y/y) and have been rising for seven consecutive months.

The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.