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US business investment plans fall for 7th straight month
[WASHINGTON] US business investment spending plans fell for a seventh straight month in March, likely weighed down by a strong dollar and lower energy prices, suggesting the economy could struggle to rebound from a soft patch hit at the start of the year.
The Commerce Department said on Friday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, declined 0.5 per cent last month after a revised 2.2 per cent drop in February, which was the biggest drop since July 2013.
The so-called core capital goods orders were previously reported to have declined 1.1 per cent in February.
Business spending on capital goods has been undermined by the buoyant dollar, which has eroded overseas profits of multinational companies. At the same time, lower energy prices have cut into domestic oil production, reducing demand for equipment by oil-field companies, including Schlumberger and Halliburton.
Economists polled by Reuters had forecast core capital goods orders gaining 0.3 per cent.
Shipments of core capital goods, which are used to calculate equipment spending in the government's gross domestic product measurement, fell 0.4 per cent last month after a downwardly revised 0.1 per cent gain in February.
Shipments in February were previously reported to have risen 0.3 per cent. That downward revision together with March's weak reading could see economists trim their first-quarter GDP growth estimates, which currently range between a 0.5 per cent and 2 per cent annual pace.
A surge in transportation equipment buoyed overall orders for durable goods - items ranging from toasters to aircraft that are meant to last three years or more - which rebounded 4.0 per cent last month.
That was the largest increase since July last year and followed a 1.4 per cent decline in February.