Durable Goods Orders Fall 1.3% in September
Slackening demand for cars and airplanes in September helped drive down overall orders for big-ticket manufactured goods by 1.3%, government figures showed Wednesday.
Although it was the first decline since April--and worse than the 0.4% drop many analysts were expecting--economists still believe manufacturers are recovering from the darkest days of the global financial crisis.
Orders for all durable goods--items expected to last at least three years--declined last month to a seasonally adjusted $204.9 billion, the Commerce Department said.
Economists cautioned against reading too much into one month of data and said September’s drop doesn’t signal an end to the rebound manufacturers have been enjoying this year.
“There’s nothing to worry about in the manufacturing sector,” said Russell Sheldon, chief economist for MCM MoneyWatch. Manufacturing slowed moderately last month, but data so far this year “point to a pretty healthy manufacturing sector,” he said.
For the first nine months of 1999, durable goods orders are 7% higher than in the same period last year.
September’s decrease was led by a 3.9% drop in orders for transportation equipment, also the first decline since April, reflecting weaker demand for airplanes and aircraft parts and automobiles and car parts.
Transportation often is volatile from month to month because it includes such big-ticket purchases as airplanes.
Meanwhile, orders rose 0.4% for both industrial machinery--including computers and machine tools--and electronic and other electrical equipment, which include semiconductors and home appliances.
Excluding transportation, overall orders for durable goods fell 0.5%, the first such decline since a 1.4% drop in May.
The global financial crisis has cut sharply into manufacturers’ overseas sales and opened them up to stiffer competition from cheaper imports.
Primary metals, the category that includes steel, saw orders fall 0.8% in September.
Shipments of big-ticket durable goods, a good sign of current demand, also fell a sizable 1.9% in September, the first decrease since April.
