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Wednesday, May 28, 2008

A Surprisingly Good Durable Goods Report

It's true that overall new orders dropped again, but when you strip out transport, and especially motor vehicles, it's clear that other industrial segments are really picking up. Full advance report in pdf.

There has been parts supplier strike which is messing up the data for motor vehicles a bit, but it looks like we are getting close to drawing down motor vehicle inventories enough to see a bottom in a couple of months.

Comparing 2008 to 2007 YTD:
Motor vehicles:
Unfilled Orders: -12.7
Inventories: -7.1
Shipments: -11.8
Apr Shpmts: -2.9

Fabricated Metals:
Unfilled Orders: 8.2
Inventories: 2.3
Shipments: 1.1
Apr Shpmts: 1.2

Primary Metals:
Unfilled Orders: 3.1
Inventories: 3.2
Shipments: 8.8
Apr Shipmts: 2.4

Non Defense Capital Goods Ex-Aircraft:
Unfilled Orders: 8.8
Inventories: 5.6
Shipments: 3.8
Apr Shipmts: 0.5
It's a picture of surprising strength when you exclude motor vehicles. Non defense aircraft orders appear to have peaked and begun a decline, with new orders down 2.3% YTD compared to 2007. The big backlog in orders is still there, so the pace of production shouldn't slow this year. Computers and electronic products are still showing YoY increases.

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