Advanced Durable Goods Orders: The U.S. Census Bureau reported that new orders for durable goods increased by 0.2% month on month (m/m) in December 2020, following the 1.2% increase in November. The always-volatile nondefense aircraft orders, down 116.7% 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 decreased by 2.5% for the month and are down 8.8% on a y/y basis. Transportation orders decreased by 1.0% and were down 20.1% vs a year ago. Leaving out transportation business, orders increased 0.7% m/m and decreased 0.1% y/y.

Motor vehicles and parts were up 1.4% m/m as orders decreased 10.5% y/y. Concern was expressed that steel and aluminum tariffs may add risk to further growth. Orders for primary metal were up 0.3% m/m and have decreased 6.2% y/y.

Durable goods shipments increased 1.4% m/m and are up by 3.4% on a y/y comparison. Capital goods shipments increased by 2.0% m/m and were down 3.9% y/y.

Figure 1 shows the history of DG orders from 2010 to present. New orders totaled $245.3M in December, a 0.4% 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.