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Durable Goods Orders Rise on Transportation Equipment

Bill Koenig
By Bill Koenig Senior Editor, SME Media

Durable goods orders surged in July with transportation equipment leading the way, the U.S. Commerce Department said today in a monthly report.

Orders totaled $230.7 billion, an 11 percent increase from June. It was the third consecutive monthly rise.

Manufacturing is recovering from plant shutdowns earlier this year stemming from the novel coronavirus (COVID-19). Factory closings affected the auto and aerospace industries as companies sought to curb the spread of the virus.

The overall transportation category posted a monthly gain of 36 percent to $74.7 billion in July. It was also the third monthly increase for the category.

Motor vehicles and parts had a monthly increase of 22 percent to $64.2 billion. The North American auto industry restarted operations in May after adopting safety procedures intended to prevent the spread of COVID-19.

Orders for defense aircraft rose 77 percent to $4.7 billion. However, commercial aircraft was in negative territory, reflecting order cancellations by customers. Demand for commercial flights remains down because of the coronavirus. There have been forecasts that air travel may not reach 2019 levels until as late as 2024.

Excluding transportation, durable goods orders rose 2.4 percent. Excluding defense, orders rose 9.9 percent.

In other categories, orders for machinery gained 2 percent to $30.5 billion. Orders for fabricated metal products rose 2 percent to almost $30 billion. Orders for primary metals increased 0.2 percent to $17.9 billion.

The report is based on a survey of about 3,100 companies.

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