US durable goods orders post slower rise in March

US durable goods orders post slower rise in March

WASHINGTON: US aircraft sales forged higher in March, helping drive up orders for manufactured goods, but the pace of growth slowed from previous months, the Commerce Department reported on Thursday (Apr 27).

Total orders for durable goods recorded their third consecutive monthly increase, but excluding the volatile transportation sector, where aircraft sales can cause big monthly swings, orders fell for the first time in six months, slipping 0.2 per cent.

Total orders rose just 0.7 per cent last month to US$238.7 billion, a sharp slowdown from February's 2.3 per cent increase. Analysts had been expecting a gain of 1.2 per cent in March.

President Donald Trump has spotlighted US manufacturing as key to his agenda to revive industries that once employed far larger shares of the American workforce, although the sector was already showing signs of recovery along with the economy before he took office.

So far this year, total durable orders are up 3.4 per cent over the first three months of 2016.

After soaring in January and February this year, sales of civilian aircraft managed to add another seven percent in March, rising to US$14.4 billion. Sales of defense aircraft and parts also rose 26.1 per cent, marking a recovery from February's 11.7 per cent decline.

Ian Shepherdson of Pantheon Macroeconomics said the decline in orders excluding aircraft was "disappointing, because both survey evidence and the late Easter pointed to a decent increase."

While some commentators mentioned weather as a possible culprit in the slowdown, Shepherdson was skeptical.

"We struggle to see a consistent link between severe weather and durable goods orders but it is possible that the huge snowstorm across the northeast in the middle of March temporarily depressed activity."

Capital goods orders rose 2.5 per cent for the month, slowing from the average 4.7 per cent growth in the first two months of the year.

Auto sales fell for the second consecutive month, losing 0.8 per cent, while computers and related products fell 3.8 per cent.

Fabricated metal products also gave up 0.8 per cent but non-defence orders added 0.1 per cent, the fourth consecutive increase.

Source: AFP/de