For distributors that don’t rely on sales to Boeing Co., the July durable goods report was pretty good news.
New orders for durable goods, those designed to last at least three years, increased 1.1% in July over June when excluding transportation. New orders for transportation equipment were down 9.7%, largely due to a 32.7% decline in nondefense aircraft and parts, a proxy for sales by giant aircraft maker Boeing. Boeing received orders for 31 civilian planes in July, down from 116 in June, according to consulting firm KPMG.
Orders for motor vehicles and parts, the other major component of the nondefense transportation sector, rose by 0.3% after increasing by 1.2% in June and 0.9% in May. KPMG notes auto industry orders typically slow during the summer as manufacturers retool plants for next year’s models. The consulting firm, however, predicts lower demand for cars and trucks this fall as prices are expected to rise at a time when consumer finances are stretched.
Overall, orders for durable goods were down 2.8% in July, following a 9.4% decrease in June. “July’s outcome was better than expected as the median consensus estimate was -3.8%,” commented KPMG, which called the July report “a solid result.”
Nondefense capital spending, which reflects business investment in plant and equipment, increased 1.1% in July when excluding aircraft.
Several other categories posted solid gains. Here are the month-over-gains in July in several major categories:
- Electrical equipment, appliances and components: 2.0%
- Primary metals: 1.5%
- Fabricated metal products: 0.7%
- Machinery: 1.8%
- Computers and electronic products: 0.6%
- Other durable goods: 0.5%
