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Durable Goods Orders Rise on Motor Vehicles and Parts

Bill Koenig
By Bill Koenig Senior Editor, SME Media

Durable goods orders increased in June on a surge in orders for motor vehicles and parts, the Commerce Department said today.

Overall durable goods orders rose 7.3 percent to $206.9 billion, according to a monthly report. That followed a gain of 15 percent in May.

Leading the way was an 86 percent increase in the motor vehicles category to $52.8 billion.

The auto industry in North America resumed production in May following a shutdown because of the novel coronavirus (COVID-19). Automakers have emphasized ramping up output of high-profit large pickups. Plants have adopted new safety practices aimed at avoiding the spread of COVID-19.

The transportation equipment category posted an increase of 20 percent in orders to $55.3 billion. Meanwhile, orders for commercial and defense aircraft dropped. Commercial aircraft orders were in negative territory because of cancellations. Defense aircraft and parts orders slid 31 percent to $2.6 billion.

COVID-19 has caused airlines to slash schedules. A recovery in the sector isn’t expected to occur quickly.

Excluding transportation, durable goods orders rose 3.3 percent, the Commerce Department said. Excluding defense, new orders surged 9.2 percent.

In other categories, orders for fabricated metal products rose 4.5 percent to $29.1 billion. Orders for primary metals increased 3.6 percent to $17.8 billion. Orders for machinery rose 2.7 percent to $29.6 billion.

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

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