BLBG:Orders for Durable Goods in U.S. Increased 2.2% in February
Orders for U.S. durable goods rose in February, the fourth monthly gain in the last five and spurred by demand for cars, computers and capital equipment.
Bookings for goods meant to last at least three years advanced 2.2 percent, less than projected after a revised 3.6 percent decline the prior month, data from the Commerce Department showed today in Washington. Economists forecast a 3 percent gain, according to the median forecast in a Bloomberg News survey.
Corporate equipment upgrades and consumer purchases of new cars are bolstering production, prompting factories to hire and keeping the industry a source of strength for the expansion. Nonetheless, higher fuel costs and slowdowns in Europe and China may limit the pace of manufacturing this year.
“The weak start to the quarter has tended to give way to a stronger end of the quarter over the last 2 1/2 years since the recession ended,” Jonathan Basile, an economist at Credit Suisse in New York, said before the report. “Machinery orders for power equipment have been especially influential.”
Estimates of 83 economists surveyed by Bloomberg ranged from a drop of 1.4 percent to an increase of 6.4 percent.
Orders for durables excluding transportation equipment increased 1.6 percent after a 3 percent decline.
Demand for transportation equipment climbed 3.9 percent, led by a 6 percent advance in civilian aircraft orders. Boeing Co., the largest U.S. aircraft maker, said it received 237 orders last month, up from 150 in January.
Demand for Autos
Bookings for automobiles and parts increased 1.6 percent, the most since October, after a 1.3 percent rise the previous month.
Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. Light-vehicle sales accelerated to a 15 million annual rate, the strongest since February 2008, according to data from Ward’s Automotive Group.
“Based on what we see in terms of pent-up demand and importantly the strength of the economy, we do not believe that short-term fluctuations in pump prices will curtail industry growth this year,” Don Johnson, vice president of U.S. sales operation for GM, said on a March 1 conference call. “American consumers and the overall economy are in much better shape than they were a year ago.”
Today’s report showed bookings for non-defense capital goods excluding aircraft -- a proxy for business investment in items such as computers, engines and communications gear -- increased 1.2 percent.
Communications Equipment
Orders advanced 11.2 percent for communications equipment, the most since June 2011. Bookings climbed 2.7 percent for computers and electronic products, the most since December 2010, and 5.7 percent for machinery. Orders minus defense hardware rose 1.7 percent.
One category to show a decline was electrical equipment and appliances, which fell 2.5 percent.
Shipments of non-defense capital goods excluding aircraft, used in calculating gross domestic product, increased 1.4 percent in February after falling 3 percent.
The report also showed unfilled orders for durable goods increased 1.3 percent. Unfilled orders for non-defense capital goods minus aircraft climbed 0.7 percent after a 0.8 percent increase that shows demand may be sustained.
“A lot of our production is tight,” Michael DeWalt, director of investor relations at Caterpillar Inc. (CAT), said at a March 6 industrial conference in New York. “We have very long lead times on some product. For large mining trucks, we’re taking orders now into 2014 the business is so strong.”
March Orders
Other gauges show manufacturing continued to expand this month even as orders ease. Regional reports from the Federal Reserve show manufacturing accelerating in the New York and Philadelphia areas, while bookings cooled.
At the same time, rising oil prices may increase the cost of production for some manufacturers. Crude oil futures on the New York Mercantile Exchange have climbed 8.5 percent this year, reaching $107.26 a barrel yesterday, after surging 25 percent in the last three months of 2011.
Recent “better news” on the economy has included a “slight bit of encouraging news here and there in the housing market” as well as strength in manufacturing, Federal Reserve Chairman Ben S. Bernanke this week said in response to audience questions following a speech in Arlington, Virginia.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
