Durable Goods Orders Climb to Second Highest 12-Month Total

While high, durable goods orders have contracted 0.2 percent compared with one year ago, a likely sign that they have hit a peak this cycle.

New orders for real durable goods in June 2018 reached $272,106 million. This was the second highest total in the last 12 months, but durable goods new orders contracted 0.2 percent compared with one year ago. This slight contraction ended 13 straight months of growth. As a result, the annual rate of growth –  now 5.7 percent – decelerated for the first time since growth began accelerating in June 2017, shifting from a positive to a negative leading indicator. With real consumer durable goods spending growth flattening, it is likely that durable goods orders have hit a peak this cycle. Orders tend to lead industrial production by about three months and capital equipment consumption by 10 to 15 months.

Motor vehicle and parts orders increased 1.1 percent compared with one year ago, growing for the fifth time in six months. But, June’s growth was not strong enough to prevent further slowing in the annual rate of growth.

After very strong growth since November 2017, aerospace orders decreased 25.5 percent in June compared with one year ago. However, this may have had to do with the timing of the Farnborough Air Show this year, as the GBI: Aerospace index showed that orders were still very strong. 

Accelerating Growth: computers/electronics, HVAC, primary metals, ship/boat building

Decelerating Growth: aerospace, construction materials, durable goods, fabricated metal products, machinery/equipment, motor vehicle/parts, off-road/construction machinery, oil/gas-field/mining machinery, power generation, total capital goods

Accelerating Contraction: appliances

Decelerating Contraction: 


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World Machine Tool Survey

An independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars.

Capital Spending Survey

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Gardner Business Index

A diffusion index measuring month-to-month changes in activity at durable goods and discrete parts manufacturing facilities.