Advanced Durable Goods Orders: The U.S. Census Bureau reported that; new orders for durable goods orders decreased by 17.2% month on month, (m/m) in April, following the 16.6% decrease in March. The always-volatile nondefense aircraft orders, decreasing (N/A)% m/m and down 119.9% y/y influenced this trend significantly.

The Advance Report on Durable Goods (DG), The M3 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 decreased by 1.8% for the month and down 14.4% on a year on year, (y/y) basis. Transportation orders decreased by 47.3% and were down 28.0% vs a year ago. Leaving out transportation business, orders decreased 7.4% m/m and decreased 2.3%y/y.

Motor vehicles and parts were down 52.8% m/m as orders decrease 21.7% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were down 13.8% m/m and have decreased 9.3% y/y.

Durable goods shipments decreased 17.7% m/m and were lower by 8.0% on a year on year comparison.  Capital goods shipments decreased by 10.2% m/m and down 5.0% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $205.3M in March (3MMA), a 11.4% decrease y/y.

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