Tag: Factory/Manufactured Goods Orders

German Manufacturing Orders Unexpectedly Soar on Aircraft Purchases

[ad_1]

By Ed Frankl

German manufacturing orders jumped unexpectedly in December, driven by bumper aircraft purchases, although excluding larger orders they still fell, reflecting a difficult environment for the sector.

Orders were 8.9% higher than the previous month, German statistics office Destatis said Tuesday, flipping expectations that they would fall 0.5%, according to a consensus of economists polled by The Wall Street Journal.

It reverses many of the losses of previous months, including a 4% decline in October and a 11% dive in July, which were at the time seen as indicative of a manufacturing slump in Germany. On year, orders in December were 2.7% higher than the same month in 2022.

However, the intake was swayed by large-scale orders, in particular of aircraft, likely swelled by Airbus orders, according to Destatis. The airline manufacturer received 807 orders in the month.

For aircraft, ships and trains, incoming orders were more than twice as high in December as November. Metal products and electrical equipment orders also rose by double-digit percentages.

However, in the country’s key car industry, orders fell 15%, while they also dipped in mechanical engineering and in the chemical industry, according to the data. Excluding major purchases, orders fell by 2.2% on month.

Symbolizing Germany’s still-stuttering manufacturing base, orders were 5.9% lower in the whole of 2023 compared with 2022, Destatis said, amid a global slump in demand and tight financing conditions.

Write to Ed Frankl at edward.frankl@wsj.com

[ad_2]

Source link

February 5, 2024

U.S. factory orders plunge in July after four straight gains

[ad_1]

Orders for U.S. manufactured goods fell a sharp 2.1% in July, the Commerce Department said Tuesday. This is the first decline after four straight monthly gains.

Economists surveyed by the Wall Street Journal were expecting a 2.3% fall in July.

Excluding transportation, orders rose 0.8% in July after a 0.3% gain in the prior month.

Economists said that higher interest rates are putting pressure on business equipment spending.

Durable-goods orders fell 5.2 % in July, unrevised from the data that was released on Aug. 24. Non-durable goods orders rose 1.1%.

Orders for nondefense capital goods, excluding aircraft, rose 0.1% in July, also unrevised from prior estimate.

U.S. stocks
DJIA

SPX
were trading lower on Tuesday following the long holiday weekend.

[ad_2]

Source link

September 5, 2023
Durable-goods orders rise for third month in a row — if Boeing is taken out of the equation

[ad_1]

The numbers: Orders for long-lasting goods rose in July for the third month in a row if recent ups and downs at Boeing are set aside, suggesting the struggling industrial side of the U.S. economy may have stabilized.

Durable-goods orders increased 0.5% in July if transportation — automobiles and planes — are excluded. Boeing
BA,
-3.16%
orders often seesaw in the summer months and distort the true condition of U.S. manufacturing.

Headline orders, which include transportation, sank by 5.2% last month, the government said Thursday.

Economists polled by the Wall Street Journal had forecast a 4.1% drop in July following a 4.4% spike in June. The topsy-turvy results in the past two months are almost entirely due to Boeing.

A better measure of the health of U.S. manufacturing, known as core orders, edged up 0.1% in July. That figure omits defense and transportation and is a proxy for broader business investment.

Business investment is running slightly ahead of last year’s pace, but it has weakened considerably, and many manufacturers are treading water.

Key details: Orders for commercial planes soared 71% in June and sank 44% in July, explaining the wildly divergent headline numbers in the past two months.

Orders for new cars rose 0.8% in July.

The transportation segment is a large and volatile category that often exaggerates the ups and downs in manufacturing.

Outside the transportation sector, new orders rose in most major categories.

Business investment has tapered off since last year, however, and companies have become more cautious in the face of rising interest rates, still-high inflation and a shift in consumer spending toward services.

Durable goods are items like planes, cars, appliances and computers. Orders rise in an expanding economy and shrink in a contracting one.

Big picture: Maybe the industrial side of the economy has hit bottom, and maybe it hasn’t. Getting a clear picture might have to wait until interest rates stop rising.

Higher borrowing costs typically stunt the economy and discourage businesses from hiring, spending and investing.

Looking ahead: “Businesses are showing caution amidst the higher rate environment and what it means for demand down the line,” said economist Ali Jaffery at CIBC Economics.

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.28%
and S&P 500
SPX,
+0.24%
were set to open mixed in Thursday trades.

[ad_2]

Source link

August 24, 2023
German Manufacturing Orders Fell Unexpectedly in April on Low Foreign Demand
[ad_1]
```
By Ed Frankl
```
New orders at German factories fell unexpectedly in April, signaling continued declining demand in the country’s key manufacturing sector especially among foreign orders.

Manufacturing orders ticked down 0.4% in April on month, after a plunge of 10.9% in March, according to seasonally and calendar adjusted-data released Tuesday by the German statistics office Destatis.
The reading upturns expectations of a 3.0% rise seen by economists in a poll by The Wall Street Journal.

Foreign orders dropped by 1.8% in April on the previous month, though domestic orders rose by 1.6%, Destatis said, indicating that demand for German goods is subdued outside its borders.

Data from a purchasing managers survey showed weakening sentiment at German factories in May, suggesting that the sector could continue to weaken.

The fall was driven by declining construction of ships, railways, aircraft, and army vehicles, orders of which dived 34% on month, and for the manufacture of machinery and equipment, where it tumbled 6.2%.

However, electrical equipment and motor vehicles saw orders rise 12.0% and 2.4%, respectively.

Excluding the more volatile component of large-scale orders, new orders rose by 1.4% in April on month.

Write to Ed Frankl at edward.frankl@wsj.com
[ad_2]

Source link
June 5, 2023
April U.S. factory orders rise for fourth gain in five months

[ad_1]

Orders for manufactured goods rose 0.4% in April, the Commerce Department said Monday. It is the fourth increase in factory-goods orders in the past five months.

Economists surveyed by the Wall Street Journal were expecting a 0.6% rise.

The gain was led by transportation equipment. Excluding that sector, orders were down 0.2%.

Durable-goods orders rose 1.1% in April, unrevised from the initial estimate last week. The advance durable-goods data is always released ahead of the full report. Nondurable-goods orders fell 0.1% in April.

Orders for nondefense capital goods, excluding aircraft, rose a revised 1.3% in April, down slightly from the prior estimate of a 1.4% increase. The gain was led by computers and machinery.

[ad_2]

Source link

June 5, 2023
Durable-goods orders get a boost from military spending

[ad_1]

The numbers: Orders for manufactured goods jumped 1.1% in April largely because of the military, but business investment also rose sharply in a positive sign for the economy.

Economists polled by the Wall Street Journal had forecast a 0.8% decline. Durable goods are items meant to last a long time.

Yet orders fell 0.2% if transportation is excluded, the government said Friday. The transportation segment is a large and volatile category that often exaggerates the ups and downs in industrial production.

The pace of orders has slowed sharply over the past year and is now just slightly positive. Orders rise in an expanding economy and shrink in a contracting one.

In a good sign, business investment rose a sharp 1.4% after a string of weak readings. Companies invest more when they expect the economy to improve, but it remains to be seen if it’s the blip or the start of a trend.

Big picture: The industrial side of the economy has largely been sidelined by rising interest rates and a shift in consumer spending away from manufactured goods.

What has kept the economy afloat is an increase in spending on services such as travel, recreation and hospitality.

The divide in the economy is likely to persist for while and leave the U.S. more susceptible to a recession.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.11%
and S&P 500
SPX,
+0.88%
were set to open mildly higher in Friday trades.

[ad_2]

Source link

May 26, 2023
Manufacturing shrinks for 5th month in a row, ISM finds, with one gauge signaling recession
[ad_1]
The numbers: A key barometer of U.S. factories was negative in March for the fifth month in a row, reflecting an ongoing struggle by a key part of the economy to resume growth.

The Institute for Supply Management’s manufacturing survey dropped to 46.3% from 47.7% in the prior month. That’s the lowest level since May 2020, when the pandemic show down much of the U.S. economy.
Numbers below 50% signal that the manufacturing sector is contracting. The last time the index fell five months in a row was in 2019, during a trade fight with China.

The ISM report is viewed as a window into the health of the economy, and it shows growing strains. New orders shrank to a level historically associated with recession, for example.

Economists polled by the Wall Street Journal had forecast the index at 47.3%.

Key details:

The index of new orders dropped 2.7 points to 44.3%. “Sales a down a bit, and budgets being cut with a greater emphasis on savings,” an executive at a chemical company told ISM.

The production barometer edged up 0.5 points to 47.8%.

The employment gauge fell 2.2 points to 46.9%, marking the lowest level since early in the pandemic.

The price index, a measure of inflation, declined 2.1 points to 49.2%. Inflation is still a big worry, but price increases have slowed sharply since last summer.

Big picture: Manufacturers have battled supply shortages, high inflation and rising interest rates over the past year.

While the shortages are clearing up and inflation is slowing, interest rates are still rising, boosting the odds of recession both in the U.S. and abroad.

The result: The near-term outlook for manufacturers is still quite cloudy. More companies are tackling the problem with hiring freezes or even layoffs.

“Now companies are facing the reality that demand is not going to come back to support the current level of employment,” said Timothy Fiore, chair of the ISM survey.

Looking ahead: “The new orders index is very much in recessionary territory, with only one previous occasion over the past 60 years where the index has fallen to that level without an economic contraction following,” noted deputy chief U.S. economist Andrew Hunter of Capital Economics.

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.61%
and S&P 500
SPX,
-0.05%
rose in Monday trades.
[ad_2]

Source link
April 3, 2023
Durable-goods orders fall 1% in February. Cars and planes to blame

[ad_1]

The numbers: Orders for U.S. manufactured goods fell 1% in February because of less demand for passenger planes and new cars. Yet business investment rose for the second month in a row in a sign the industrial side of the economy is still growing.

Economists polled by the Wall Street Journal had forecast a 0.3% drop in orders. Durable goods are products like cars, appliances and computers meant to last at least three years.

Orders rise in an expanding economy and shrink in a contracting one. They are still rising but at a slower pace compared to last year.

Orders are up 2.3% over the past 12 months, marking the smallest year-over-year increase since 2020.

See government report

Key details: Orders for commercial jets and new cars both fell last month. Bookings dropped 6.6% for airplanes and almost 1% for new autos.

The transportation segment is a large and volatile category that often exaggerates the ups and downs in industrial production. Orders for both the aircraft and carmakers have been very choppy since the pandemic.

Orders excluding transportation were unchanged in February, reflecting recent weakness in manufacturing.

The most positive news in the report was the second straight increase in business investment — a sign of future demand. So-called core orders rose 0.2%.

These orders exclude military spending and the auto and aerospace industries. They are up 4.3% in the past year, but that’s also the smallest increase since 2020.

Big picture: The industrial side of the economy has slowed since last year because of steep inflation and rising interest rates. Higher borrowing costs curtail demand for expensive manufactured goods and discourage investment.

Manufacturers are still growing, but further weakness would be a bad omen. Heavy industry is at the leading edge of the economy.

The recent turmoil in the banking sector after the failure of Silicon Valley Bank could also add to the stress if banks scale back lending to businesses.

Looking ahead: “Business investment is definitely a vulnerability for the economy in the event of a severe tightening in credit conditions,” said chief economist Stephen Stanley of Santander Capital Markets. “Thus, it will be important to watch these numbers going forward.”

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.41%
and S&P 500
SPX,
+0.56%
were set to open sharply lower in Friday trades.

[ad_2]

Source link

March 24, 2023
U.S. durable-goods orders drop 2.1% in another sign of slowing economy

[ad_1]

The numbers: Orders for manufactured goods sank 2.1% in November in another sign of slackening demand in the U.S. economy as the year winds down.

Fewer contracts for commercial jets explained most of the weakness last month. But orders minus transportation and a key measure of business investment posted just very small increases.

Orders rise in an expanding economy and shrink when growth weakens. A variety of measures point to waning demand for goods due to a more fragile economy and a shift in consumer spending toward services such as travel and recreation.

Economists polled by the Wall Street Journal had forecast a 1.1% decline in orders for durable goods — or products meant to last at least three years.

Key details: Orders for aircraft nosedived 36% last month, reflecting typical seasonal swings in contract signings. Demand for new cars and trucks also fell slightly.

The transportation segment is a large and volatile category that often exaggerates the ups and downs in industrial production.

Outside of transportation, new orders rose a meager 0.2%. Bookings increased in every major category except primary metals.

Business investment, meanwhile, also rose 0.2% last month, but the annual rate of growth has slowed sharply in recent months to 5.7% from more than last spring.

These orders exclude military spending and the auto and aerospace industries.

Big picture: American manufacturers are likely to tread water for a while.

Higher interest rates have sapped demand for houses, new cars and other big-ticket items because of the added costs and a fading global economy has curbed exports.

The Federal Reserve plans to keep raising interest rates to tame high inflation, so the slowdown in manufacturing could intensify.

The one side-benefit? Congested supply chains are clearing up and reducing a primary driver of inflation over the past few years.

Looking ahead: “Underlying investment demand is weakening,” said senior U.S. economist Andrew Hunter in a note to clients. “We expect it to weaken more markedly next year as the full impact of the Fed’s aggressive tightening this year feeds through.”

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.53%
and S&P 500
SPX,
+0.59%
were set to open higher in Friday trades.

[ad_2]

Source link

December 23, 2022
The U.S. economy is losing speed, S&P surveys show

[ad_1]

The numbers: Business conditions at U.S. companies deteriorated again in November and pointed to a slowing economy.

The “flash” U.S. services sector index drop to a three-month low of 46.1 this month from 47.8 in October, keeping it near the lowest level of the pandemic era. The service side of the economy employs most Americans.

The S&P Global U.S. manufacturing sector index, meanwhile, slid to a 2 1/2-year low of 47.6 from 50.4.

Any number below 50 reflects a contracting economy.

Key details: New orders, a sign of future sales, fell in November at the fastest pace since early in the pandemic in 2020, S&P Global found. Exports also declined.

The cost of supplies, a measure of inflation, eased again in a sign that intense inflationary pressures are on the wane. Companies also raised prices at the slowest rate in more than two years.

Shortages of supplies, a big problem during the pandemic, also continued to diminish.

These shortages were one of the biggest contributors to the U.S. and global surge in inflation. While they are fading, they remain a big problem.

Big picture: Businesses are still expanding by some measures, but they are also preparing for slower economic growth.

Rising interest rates orchestrated by the Federal Reserve have dampened sales in the U.S. while a strong dollar has hurt exports by making American products more expensive.

Looking ahead: “Inflationary pressures should continue to cool in the months ahead, potentially markedly, but the economy meanwhile continues to head deeper into a likely recession,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.28%
and S&P 500
SPX,
+0.59%
rose in Wednesday trades.

[ad_2]

Source link

November 23, 2022
Durable-goods orders jump 1%, but momentum unlikely to last as U.S. economy slows

[ad_1]

The numbers: Orders at American factories for long-lasting goods such as autos and computers jumped 1% in October, marking a strong showing that probably isn’t sustainable because of a slowing U.S. economy.

Economists polled by the Wall Street Journal had forecast a 0.5% increase. Durable goods are items such as autos, appliances and computers meant to last at least three years.

A key measure of business spending, meanwhile, also rose a solid 0.7% last month.

Orders tend to rise steadily in an expanding economy and shrink when it weakens. Yet the results in October don’t look quite as strong after inflation is taken into account. The consumer price index rose 0.4% last month.

Big picture: Manufacturers are able to produce more of what their customers want after two years of chronic shortages, but mostly because demand has softened. Rising U.S. interest rates have curbed sales at home while a strong dollar has dented exports.

The situation could get worse. The Federal Reserve is jacking up interest rates to bring down high inflation, but higher borrowing costs are expected to slow the economy even further.

Key details: Orders for new cars climbed 0.6% in October. Orders for aircraft rose a sharper 7.4%. The transportation segment is a large and volatile category that often exaggerates the swings in industrial production.

Outside of transportation, new orders rose a still-decent 0.5%. Bookings increased in every major category except for primary metals.

The rate of growth in business investment, or core orders, has slowed considerably. however. The figure excludes military spending and the auto and aerospace industries.

Looking ahead: “Business equipment investment continues to hold up reasonably well in the face of higher borrowing costs,” said senior U.S. economist Andrew Hunter of Capital Economics, but “we doubt that resilience will continue indefinitely.”

Market reaction: The Dow Jones Industrial Average
DJIA,
+0.50%
and S&P 500
SPX,
+0.59%
were set to open slightly higher in Wednesday trades.

[ad_2]

Source link

November 23, 2022
German factory orders fall a bigger-than-expected 4% in September

[ad_1]

New orders in Germany’s manufacturing sector fell sharply and by more than forecast in September reflecting weakening external demand for goods in a context of rising input costs and high energy prices.

Factory orders fell 4.0% on month, data from the German statistics office Destatis showed Friday. The decrease was considerably steeper than forecast by economists polled by The Wall Street Journal, who expected orders to fall by 0.5%.

The German statistics office revised new orders data for August. Following the revision, orders fell 2.0% on month, instead the 2.4% decline first estimates showed.

Domestic orders increased by 0.5% while foreign orders were down 7.0% on month. New orders from the eurozone decreased 8.0%, while new orders from other countries fell by 6.3% compared with August, Destatis’ data showed.

The producers of capital goods recorded a decrease of 6.0% month-on-month and producers of intermediate goods saw a fall in new orders of 3.4%. Regarding consumer goods, orders rose by 7.2% on month, Destatis said.

Compared with September 2021, new orders fell by 10.8%. The volume of new orders in September 2021 was exceptionally high, Destatis noted.

Write to Maria Martinez at maria.martinez@wsj.com

[ad_2]

Source link

November 3, 2022