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Aviation woes hold back US durable goods orders in March: govt

·2-min read
Canceled orders for Boeing aircraft sunk US transportation orders in March, though activity was much higher than in March 2020

US orders for big-ticket manufactured goods grew in March but far less than expected due to canceled aircraft purchases, according to government data Monday.

The Commerce Department reported durable goods orders rose by 0.5 percent last month, rebounding after a 0.9 percent contraction in February.

The gain was only about a quarter of what analysts expected, as both defense and non-defense aircraft saw orders decline.

The 46.9 percent plunge in orders for non-defense aircraft and parts held the sector back as Boeing continued to deal with the drop in travel demand caused by the Covid-19 pandemic and troubles with its best-selling 737 MAX jet.

Excluding defense, durable goods orders grew 1.6 percent, also slightly less than expected, according to the report.

Fabricated metal products led the increase, rising 3.6 percent to $35.4 billion.

"We hoped for bigger recoveries in orders ex-transportation and core capital goods orders, following the huge hit from the winter storm in February, but it's far too soon to argue that these data signal a moderation in the pace of the industrial recovery," Ian Shepherdson of Pantheon Macroeconomics said.

The Easter holiday may have disrupted manufacturing in the month, he said, and predicted stronger growth in April and through the third quarter, if not longer.

Orders for defense aircraft and parts fell 20.2 percent, and transportation equipment was 1.7 percent lower than February.

But motor vehicles and parts grew 5.5 percent, keeping the sector from a worse decline.

Durable goods orders were 10.9 percent higher than in March 2020, when the sector contracted 16.7 percent as the Covid-19 pandemic began.

Despite Boeing's struggles, non-defense aircraft and parts orders were 1,424.5 percent higher than a year ago as the company took new orders after months of cancelations.

Defense aircraft and parts were 3.8 percent lower, while motor vehicles were up 8.3 percent compared to the same period of 2020.

cs/hs