Advanced Durable Goods Orders: The U.S. Census Bureau reported that new orders for durable goods orders increased by 0.9% month on month (m/m) in November 2020, following the 1.8% increase in October. The always-volatile nondefense aircraft orders, down 125.3% 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 0.1% for the month and down 9.8% on a year on year (y/y) basis. Transportation orders increased by 1.9% and were down 21.5% vs a year ago. Leaving out transportation business, orders increased 0.4% m/m and decreased 0.9% y/y.

Motor vehicles and parts were up 2.4% m/m as orders decreased 12.3% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were up 0.4% m/m and have decreased 7.4% y/y.

Durable goods shipments increased 0.3% m/m and were lower by 5.9% on a year-on-year comparison. Capital goods shipments decreased by 0.9% m/m and down 4.7% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $244.1M in November, a 1.9% increase 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.