Advance Durable Goods Orders: The U.S. Census Bureau reported that new orders for durable goods in May 2021 increased by 2.3% month on month (m/m) to $253.3M, following the 0.8% decrease in April. The always-volatile nondefense aircraft orders, up 1000+% year on year (y/y), influenced this trend significantly.

The Advance Report on Durable Goods (DG) is based upon data reported from manufacturing establishments with $500 million or more in annual shipments. Units may be divisions of diversified large companies, large homogenous companies, or single-unit manufacturers in 89 industry categories.

Capital goods orders increased by 4.2% for the month and are up 34.3% on a y/y basis. Transportation orders increased by 7.6% and were up 50.3% vs. a year ago. Leaving out transportation business, orders increased 0.3% m/m and increased 17.7% y/y.

Motor vehicles and parts were up 2.1% m/m as orders increased 32.8% y/y. Orders for primary metal were up 2.2% m/m and have increased 24.7% y/y. Durable goods shipments increased 0.4% m/m and are up by 15.5% vs. a year ago. Capital goods shipments decreased by 0.5% m/m but are still up 11.9% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $253.3M in May, a 31.5% increase y/y.

At Gerdau, we routinely monitor advance durable goods orders since it provides a good read on the current health of the US manufacturing economy and its probable short-run future.