Economy

Durable Goods Orders Break Streak of Gains in February

March 24, 2021

After nine months of gains, orders for durable goods surprised economists with a 1.1% decline in February to $254 billion. The U.S. Census Bureau report on Wednesday indicated core capital goods–non-defense orders minus aircraft and a measure of future investment–dipped 0.8% after gaining 0.6% in January.

The decline in new orders was led by a 1.6% decline in transportation equipment. Orders for motor vehicles and parts plummeted 8.7% after inching downward 0.9% the previous month. Commercial aircraft had a welcome respite, soaring 103.3% after Boeing received more than 80 aircraft orders.

Shipments broke a five-month streak by tumbling 3.5% in February. Transportation equipment led the decrease, dropping 8.2% during the month. Shipments for primary metals fell 1.1% and fabricated metal products 0.7%.

Manufacturers struggled with supply chain delays, input shortages and adverse weather that contributed to the declines in February.

The Census Bureau’s February advance report on durable goods manufacturers’ shipments, inventories and orders follows:

New Orders

New orders for manufactured durable goods in February decreased $2.9 billion or 1.1% to $254.0 billion. This decrease, down following nine consecutive monthly increases, followed a 3.5% January increase. Excluding transportation, new orders decreased 0.9%. Excluding defense, new orders decreased 0.7%. Transportation, down following five consecutive monthly increases, led the decrease by $1.3 billion or 1.6% to $83.6 billion.

Shipments

Shipments of manufactured durable goods in February, down following five consecutive monthly increases, decreased $9.1 billion or 3.5% to $250.9 billion. This followed a 1.7% January increase. Transportation equipment, also down following five consecutive monthly increases, led the decrease by $7.0 billion or 8.2% to $78.6 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in February, up two consecutive months, increased $8.4 billion or 0.8% to $1,082.0 billion. This followed a 0.2% January increase. Transportation equipment, up following 11 consecutive monthly decreases, led the increase by $5.0 billion or 0.7% to $711.1 billion.

Inventories

Inventories of manufactured durable goods in February, up following two consecutive monthly decreases, increased $2.8 billion or 0.7% to $427.3 billion. This followed a 0.3% January decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase by $0.9 billion or 0.6% to $146.6 billion.

Capital Goods

Nondefense new orders for capital goods in February increased $4.2 billion or 5.6% to $79.6 billion. Shipments decreased $2.2 billion or 2.9% to $74.5 billion. Unfilled orders increased $5.1 billion or 0.9% to $592.1 billion. Inventories increased $0.3 billion or 0.2% to $192.2 billion.

Defense new orders for capital goods in February decreased $1.6 billion or 10.6% to $13.5 billion. Shipments decreased $0.1 billion or 0.9% to $13.1 billion. Unfilled orders increased $0.3 billion or 0.2% to $180.2 billion. Inventories increased $0.2 billion or 1.0% to $21.4 billion.

Revised January Data

Revised seasonally adjusted January figures for all manufacturing industries were: new orders, $509.2 billion (revised from $509.4 billion); shipments, $512.2 billion (revised from $513.3 billion); unfilled orders, $1,073.6 billion (revised from $1,072.8 billion); and total inventories, $696.8 billion (revised from $696.3 billion).