Advanced Durable Goods Orders: The U.S. Census Bureau reported that; new orders for durable goods orders decreased by 0.2% month on month, (m/m) in January, following the 2.9% increase in December. The always-volatile nondefense aircraft orders, decreasing 66.7% m/m and down 41.8% y/y influenced this trend significantly.

The Advance Report on Durable Goods (DG), provides statistics on manufacturers’ value of shipments, new orders, end-of-month unfilled orders and total inventory. Data are collected and tabulated by six-digit NAICS (North American Industry Classification System). The M3 is based upon data reported from manufacturing establishments with $500 million or more in annual shipments

Capital goods orders increased by 0.6% for the month and down 7.9% on a year on year, (y/y) basis. Transportation orders decreased by 2.2% and were down 7.8% vs a year ago. Leaving out transportation business, orders increased 0.9 m/m and remained flat y/y.

Motor vehicles and parts were down 0.8% m/m as orders decrease 3.6% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were up 0.3% m/m and have decreased 5.4% y/y.

Durable goods shipments decreased 0.2% m/m and were lower by 2.2% on a year on year comparison.  Capital goods shipments increased by 0.2% m/m and down 3.8% y/y.

At Gerdau, we routinely monitor durable goods orders since it provides a good read on the current health of the US manufacturing economy and its probable short-run future.