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Durable Goods Orders Rise on Machinery

Bill Koenig
By Bill Koenig Senior Editor, SME Media

Durable goods orders rose slightly in August, led by machinery, the U.S. Commerce Department said today in a monthly report.

Orders increased 0.4 percent on a monthly basis to $232.8 billion, the department said. The small gain followed an adjusted increase of 11.7 percent in July.

The August figure represented the fourth consecutive monthly increase. Earlier in the summer, orders surged as manufacturing geared up operations following plant shutdowns related to the novel coronavirus (COVID-19).

The top-performing category in August was machinery, up 1.5 percent to $31.2 billion. The sector also has posted four straight monthly increases.

Excluding transportation, new orders rose 0.4 percent. Excluding defense, new orders increased 0.7 percent.

Overall transportation orders rose 0.5 percent to $74.8 billion. But important transportation sectors didn’t fare as well.

Motor vehicles and parts declined 4 percent to $61.4 billion. The North American auto industry restarted factories in May with new safety procedures in place because of COVID-19. That resulted in order increases in June and July.

Commercial aircraft orders were in negative territory, reflecting cancelations. COVID-19 slammed demand for air service. Airlines responded by cutting flights. Forecasters have said demand for air travel may not recover fully until 2025.

Orders for defense aircraft slid 6.4 percent to $4.3 billion.

Among other categories, orders for primary metals rose 1.2 percent to $18.4 billion. Orders for fabricated metal products slipped 1.3 percent to $30.1 billion.

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

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