Orders for US-made durable goods plunged once again in December, ending a downright awful 4th quarter where new orders plummeted 4.9% on average. December was slightly better, as orders were down only 2.6%, according to the Commerce Department’s monthly M3 Report. It is the fifth straight monthly decline, and was pushed lower by weaker demand for pretty much everything except defense-related items. Economists were expecting a decline of 2.0% for the month.
Excluding the 0.6% increase in transportation orders, and durable goods fell 3.6%. Excluding defense-related items, orders fell a more severe 4.9%.
Orders for core capital equipment, equipment businesses invest in to expand or update their productive capacity, fell 2.8%. Core capital equipment orders, which exclude aircraft and non-defense goods, are the best monthly indicator of capital expenditures.
Shipments fell 0.7% in December, and were down 1.4% excluding transportation goods. Inventories rose 0.4% as manufacturers were unable to sell goods.
Unfilled orders fell 1.3%
Orders for non-aircraft nondefense capital goods (the “core”) fell 2.8%, while shipments rose 0.9%.
Orders for transportation goods rose 0.6%, led by a 16.4% increase in bookings for defense aircraft. Orders for motor vehicles fell 5.2%. Shipments of transportation goods rose 1.3%.Civilian aircraft was supposed to be one bright spot this month after the end of a strike at Boeing Co (BA), but orders in the sector fell 43.6% according to the report.
Orders for computers and electronics (excluding semiconductors) fell 7.2%, including a 4.9% decline in demand for communications equipment. Shipments of electronics (including semiconductors) rose 0.1%.
Orders for machinery fell 5.0%. Shipments rose 2.5%.
Orders for electrical equipment rose 9.4%. Shipments rose 1.5%.
Orders for fabricated metals fell 3.6%. Shipments fell 3.3%.
Orders for primary metals fell 6.9%. Shipments fell 7.4%.
Orders for defense capital goods increased 32.9%. Shipments fell 5.9%.
November was downwardly-revised to a negative 3.7%, more than double the previous estimate of 1.5%. For the year, orders for durable goods are down 5.7% , the largest decline since 2001.
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