Aircraft, autos boost US manufactured goods orders in September

ORDERS for big-ticket US-made goods rose in September, government data showed Thursday (Oct 27), helped by aircraft and autos.

Durable goods orders increased 0.4 per cent last month to US$274.7 billion, said the Commerce Department, picking up less than expected but still reversing the weaker showings of previous months.

New orders were boosted by a double-digit jump in the non-defence aircraft segment, while military aircraft orders plunged 32.2 per cent, data showed.

Excluding transportation, new orders fell 0.5 per cent in September, on weakening demand for manufactured goods.

Surging inflation in the United States and supply chain problems have challenged the industry and consumers, sparking a pullback in spending and investment.

Fresh orders for computers and electronics declined 0.4 per cent last month, while those for electrical equipment and appliances sank 1.3 per cent.

“Although domestic manufacturing production remains resilient for now, weakening orders do not bode well for the outlook,” said Barclays analysts.

The economy is likely “headed for weaker growth” in the fourth quarter and a recession in the first half of 2023, as corporate profit margins narrow and earnings growth weakens, said Kathy Bostjancic of Oxford Economics.

She noted that a dwindling pipeline excluding the transportation sector offers little push for manufacturing activity in the coming months as well.

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“The confluence of highly elevated inflation, higher interest rates, weakening demand, softening earnings growth and downbeat sentiment will cause durable goods activity to struggle next year,” Bostjancic said. AFP