Durable Goods New Orders Spotlight a Manufacturing Slowdown

Mish

A close look at durable goods new orders shows the manufacturing recovery has slowed.

The Census Bureau report on Durable Goods New Orders and Shipments shows growth in new orders has slowed to a crawl.

New Orders Month-Over-Month 

Durable Goods New Orders Percent Change Month Over Month 2020-08

These month over month comparisons are wildly distorted. 

But for those interested, the recovery continued for a fourth month with new orders up a tiny 0.4% vs an econoday consensus of 1.5%.

Durable Goods New Orders 1993-Present

Durable Goods New Orders Millions of Dollars 2020-08 Long TermA

Durable Goods New Orders Percent Change From Year Ago

Durable Goods New Orders Percent Change From a Year Ago 2020-08

The above chart is the worst looking yet. It shows a rolling decline in manufacturing that stated mid-2018. 

Percent changes month over month for aircraft were so wild I had to remove them to prevent severe chart distortions.

One of the best ways to see the covid impact is to look at year-to-date totals on new orders and shipments.

Year-to-Date Highlights

  • New Orders: -11.3%
  • Shipments: -8.6%
  • New Orders Excluding Transportation: -3.0%
  • Shipments Excluding Transportation: -2.8%
  • New Orders Excluding Defense: -12.3%
  • Shipments Excluding Defense: -9.1%

Government military spending added a percentage point to the recovery in durable goods.

Mish

Comments (9)
No. 1-8
davebarnes2
davebarnes2

We are nesting. That means buying stuff. We are doing our best to support the world's economies.

Casual_Observer
Casual_Observer

We will soon be back to 1% GDP as far as the eye can see. This will effectively be the same as how things felt from 2014-2019 but it will feel better because of 2020 and the negative effect of a poorly managed executive branch even relative to the non-executive branches of government.

Greggg
Greggg

Durable goods supply chain still broken. It takes production of several different manufacturers to put a finished product together. Demand at that point cannot be supplied in many instances, hence, finished product is not in the warehouse. How much of that is a drop in demand?

reader2006
reader2006

Looks like we took a harder hit in 2009 and came back and we will come back again.

PecuniaNonOlet
PecuniaNonOlet

Wow, Mish posts economic analysis and hardly anyone comments despite several commenters demanding mish stop posting about trump. Mish posts something about trump gets hundreds of comments.

Thanks for the hard work Mish.

Eddie_T
Eddie_T

Guess we all need to buy a car. It's our patriotic duty. Buy American..

Seriously? I don't think we've hit the bottom on the economic effects of COVID...we just haven't felt them all yet...but it is coming.

Conniel
Conniel

A close look at durable goods new orders shows the manufacturing recovery has slowed. The Census Bureau report on Durable Goods New Orders and Shipments shows growth in new orders has slowed to a crawl.