After declining more than 20% between February and April because of the disruptions caused by the COVID-19 pandemic, new orders for US made durable goods grew for the third straight month in July, according to a new Census Bureau report. Orders for durable goods, which are designed to last at least three years, rose 11.2% in July from the previous month, following a 7.7% increase in June.
The double-digit gain posted in July is all the more remarkable considering the record number of new coronavirus cases recorded in the US during the same month.
Time will tell if the increase in durable goods orders will persist as the country continues to reopen its economy and capital spending turns upward. A particular challenge will be operating manufacturing in a pandemic era that requires social distancing among line workers and the specter of additional waves of infections having over the economy.
Growth has been especially strong, albeit from a low base, in the auto industry as sales begin to recover from the worst stretch of the pandemic and plants increase production. New orders for motor vehicles and parts rose 21.9% in July, surpassing pre-pandemic levels. Sales are benefiting from discounts being offered at the dealer level as well as a trend of consumers who had previously used public transportation and ride-share services seeking the protection of riding in their own vehicles.
The worst performing manufacturing industry was nondefense aircraft and parts. Orders were negative in both June and July, reflecting the poor business conditions that continue to haunt the air transportation industry as both business and personal travel activity remains sharply curtailed.
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly for machinery and equipment, with reports such as Commercial Refrigeration Equipment, Global Food Processing Equipment, Global Material Handling Equipment, Global Off-Road Equipment Technology 2020, and Global Packaging Machinery. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.