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Durable Goods Orders Rise on Transportation

Bill Koenig
By Bill Koenig Senior Editor, SME Media

New orders for durable goods rose 3.4 percent last month, paced by transportation equipment, the Commerce Department said today.

New orders increased $8.5 billion to $256.6 billion, according to a monthly report. It was the ninth consecutive monthly gain.

The transportation category surged 7.8 percent to $85.1 billion. The sector has posted eight increases in the past nine months.

Commercial and defense aircraft led the transportation results. Orders for commercial aircraft and parts soared by almost five-fold to $5 billion. Orders for defense aircraft and parts increased 63.5 percent to $4.8 billion.

Aerospace was one of the manufacturing industries hardest hit by the COVID-19 pandemic. Orders for commercial aircraft were canceled amid plunging demand for air travel.

In 2020, Boeing Co. also felt the impact of the grounding of the 737 Max following two fatal crashes. The grounding began in early 2019.

Late in 2020, U.S. regulators permitted the 737 Max following a software fix and other steps to address problems with the plane. Boeing is working with regulators in other regions to get the 737 Max back into service.

Within transportation, orders for motor vehicles and parts fell 0.8 percent to $63.2 billion.

The auto industry bounced back quicker from the pandemic. Plants reopened in May 2020 after implementing new safety procedures because of COVID-19. Deliveries of pickups, SUVs and crossovers have benefited automakers. However, a global shortage of computer chips for automotive use is holding back the industry.

Excluding transportation, new orders gained 1.4 percent. Excluding defense, orders increased 2.3 percent.

Among other industries, primary metals rose 3.2 percent to $20.8 billion. Orders for fabricated metal products gained 1.8 percent to almost $33.5 billion. Orders for machinery slipped 0.3 percent to $33.5 billion.

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

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