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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller June 24, 2021
• Transportation orders surge, while ex-transportation improves further.
• Core capital goods orders ease following earlier strength.
• Shipments rise along with order backlogs & inventories.
The factory sector remains on a firm footing. Manufacturers' orders for durable goods jumped 2.3% (41.6% y/y) during May following a 0.8% April decline, revised from -1.3%. A 3.0% rise had been expected in the Action Economics Forecast Survey.
Strength in transportation equipment orders propelled last month's increase with a 7.6% jump, more than doubling y/y. The gain was driven by a surge in nondefense aircraft orders as well as a 2.1% increase (95.6% y/y) in orders for motor vehicles & parts. Excluding transportation, orders improved 0.3% (25.2% y/y) following a 1.7% rise in April, revised from 1.0%.
Orders for nondefense capital goods orders excluding aircraft eased 0.1% (22.7% y/y) following a 2.7% April gain, revised from 2.3%. Elsewhere in the report, orders were mixed. Orders for primary metals rose 2.2% (46.9% y/y) but orders for fabricated metal products fell 1.1% (+34.1% y/y). Electrical equipment orders surged 1.3% (23.8% y/y) but machinery orders eased 0.4% (+23.8% y/y). Computer & electronic product orders slipped 0.3% (+8.9% y/y).
Durable goods shipments rose 0.4% in May (31.6% y/y) after easing marginally in April, revised from +0.6%. Shipments of nondefense capital goods excluding aircraft rose 0.9% (20.4% y/y). Shipments of transportation products overall eased 0.4% (+69.0% y/y), while shipments excluding transportation products rose 0.7% (20.9% y/y).
Unfilled orders for durable goods rose 0.8% (-1.4% y/y). Order backlogs excluding transportation rose 1.6% (11.9% y/y).
Inventories of durable goods rose 0.7% (3.3% y/y) in May for the second consecutive month. Excluding transportation, inventories surged 1.0% (2.8% y/y), up from inventory decumulation last spring & summer.
The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.
| Durable Goods NAICS Classification | May | Apr | Mar | May Y/Y % | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| New Orders (SA, % chg) | 2.3 | -0.8 | 1.3 | 41.6 | -13.6 | 3.5 | 5.1 |
| Transportation | 7.6 | -6.6 | -3.1 | 106.4 | -35.5 | 13.2 | 1.7 |
| Total Excluding Transportation | 0.3 | 1.7 | 3.3 | 25.2 | -1.2 | -1.3 | 6.9 |
| Nondefense Capital Goods Excl. Aircraft | -0.1 | 2.7 | 1.6 | 22.7 | 1.0 | -0.1 | 5.9 |
| Shipments | 0.4 | -0.0 | 2.7 | 31.6 | -6.3 | -1.4 | 5.7 |
| Nondefense Capital Goods Excl. Aircraft | 0.9 | 1.0 | 1.6 | 20.4 | -0.3 | 0.7 | 6.3 |
| Unfilled Orders | 0.8 | 0.4 | 0.5 | -1.4 | -8.2 | 10.2 | -1.6 |
| Inventories | 0.7 | 0.7 | 1.1 | 3.3 | 0.5 | 5.9 | 4.4 |
