MAPI comments on durable goods report

Flat year-over-year growth in non-defense capital goods matches flat equipment and software spending.

By ·

Cliff Waldman, Senior Economist for the Manufacturers Alliance for Productivity and Innovation commented today that, excluding the often volatile demand for transportation equipment, total new orders were up by 1.5 percent and have been modest in recent months. “Given the high degree of uncertainty in the global economic climate and from U.S. fiscal policy, it is something of an upside surprise that orders for long-lasting goods were flat in October, although this number has been volatile in recent months, rising by 9.2 percent in September after a 13.1 percent decline in August,

“In spite of a raft of global economic troubles and the prospect of a fiscal mess in the early part of the new year, orders for non-defense capital goods, excluding aircraft, a proxy for business equipment spending, were up by 1.7 percent in October, although they were flat on a year-over-year basis, corroborating the flat equipment and software spending growth seen during the third quarter of this year,” he added. “Clearly, business decision makers are engaging in just enough capital spending to keep their enterprises going.  In a shaky global economy and a highly uncertain U.S. policy environment, there is not going to be much entrepreneurial business expansion of the type that would result from, and reinforce, a strong economic expansion.

“Recent data continue to suggest that U.S. factory sector growth, while having slowed significantly, is at least staying above water,” Waldman concluded. “In October, demand for the output of industry sectors that are fundamental to manufacturing supply chains—such as machinery, primary metals, and fabricated metals—were all positive, although machinery demand was down by 3.3 percent on a year-over year basis.  While slow but positive growth remains the most likely path for U.S. manufacturing over the short-term, U.S. and world economies that still have the potential to deliver negative surprises suggest that the risks remain on the downside for U.S. goods producers.”


Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

Economy · MAPI · · All Topics
Latest Whitepaper
What Costs Less? Doing Nothing or Automating Your DC?
Obsolete warehouse hardware and software cannot keep up with increasingly complex fulfillment requirements, especially for multi-channel retailers.
Download Today!
From the August 2016 Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
5 Emerging Technologies Enabling Competitive Advantage for Distribution
Come hear about the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids that are enabling competitive advantage for distribution.
Register Today!
EDITORS' PICKS
The data-driven lift truck
Now that manufacturers and distributors are using the data from their automated systems to drive...
Destination Maternity: Destination Automation
Running short of space in its old facility, Destination Maternity Corp. built a new, highly...

Hibbett Sports: Faster, Flexible and Efficient
A high-speed conveyor and sortation system at Hibbett Sports’ Alabama distribution center speeds...
Necessity is the mother of invention at Quiet Logistics
Faced with the loss of a robotic pick solution, Quiet Logistics invented its own robots. Are they...