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US-MANUFACTURING-DURABLE-INDICATOR
Weak aircraft sales drive US durable goods slump in February
WASHINGTON, April 3, 2019 (BSS/AFP) – Sales of big-ticket US manufactured
goods sank unexpectedly in February, with a sharp drop in aircraft sales, and
weakness in key sectors like autos and industrial equipment, the government
reported Tuesday.
The sudden dip, which came with a downward revision to January, marked the
second monthly slowdown for the sector and could weigh on GDP growth in the
first quarter of 2019.
A closely-watched measure seen as a proxy for business investment also
fell, reversing January’s gains, according to the Commerce Department.
Total orders for US durable goods fell 1.6 percent from January to $250.6
billion, the lowest level since October, which represented a far steeper
decline than the 0.9 percent decrease that economists had been expecting.
Orders for civilian aircraft, a sector largely dominated by Boeing that
sees big swings from month to month, fell 31.1 percent after two months of
gains.
As the numbers were recorded in February, they will not reflect the fall-
out from the March 10 crash of a Boeing 737 MAX 8 plane in Ethiopia, which
caused global authorities to ground the plane and Boeing to suspend
deliveries.
Sales of autos were 0.1 percent lower, marking the second month in the red
for the key US sector.
Excluding the volatile transportation category, durable goods orders were
up a tepid 0.1 percent for the month, undershooting analyst forecasts for a
0.1 percent gain.
Orders for machinery, computers, communications equipment and defense
articles all fell while some gains were recorded in primary metals and metal
fabricated products as well as electrical equipment and products.
But non-defense capital goods excluding aircraft — a measure seen as a
proxy for investments in equipment for factories and oil drilling equipment –
– fell 0.1 percent, the third decline in four months.
Such capital spending is crucial to industrial output and hiring,
economists say.
Ian Shepherdson of Pantheon Macroeconomics said survey data suggested the
declines in capital expenditures had likely stabilized.
“We’re sticking to our view that business spending on equipment will be
very soft in the first and second quarters, but the second half should be
better,” he said.
BSS/AFP/HR/0935