Transportation, Defense Orders Bright Spots For Largely-Flat Market
According to the latest Commerce Department data on durable goods orders, in March US factory orders for durable goods were up 0.8% to $230.7 billion. Though this was a positive result following February’s durable goods order decline of 3.1%, when the category of transportation orders was excluded for March, all new orders fell by 0.2%, and when the category of defense was excluded, new orders fell by 1.0%. The AP reports that for March, capital goods orders excluding aircraft and defense — considered a proxy for business investment — were essentially flat, after falling 2.7% in February. Economists had forecast a 0.6% increase in the crucial category, the AP says. USA Today points out that the overall March increase of 0.8% was less than half the 1.9% increase in March durable-goods orders that economists had predicted. And February’s 2.8% fall was revised to a 3.1% drop. The story notes that for two years, US manufacturers “have been struggling … amid a listless global economy and a strong dollar that have pummeled exports and low oil prices that have led crude producers to throttle back drilling and investment in pipes and other equipment.”
What This Means For Small Businesses
Small businesses involved in the manufacture and sale of durable goods are seeing a general pattern of market uncertainty continue. This is affecting the overall business outlook of many owners. NFIB’s latest Small Business Economic Trends report indicated that small business owners are less optimistic about the economy, in part due to continued sluggishness in the manufacturing sector. Commenting on the results, NFIB Chief Economist Bill Dunkelberg cautioned that the small business sector is currently “underperforming, doing little more than operating in maintenance mode.”
Reuters also covers the latest durable goods data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.