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Materials handling business: Commerce Department reports increases in durable goods new orders

June 01, 2010

In another sign that the United States economy is gradually recovering, the Commerce Department reported last week that new orders for manufactured durable goods in April were up 2.9 percent from March to $193.9 billion and were up 16.8 percent year-over-year. This marks the fourth time in the last five months new orders were up.

Commerce also reported that durable goods shipments were up for the second straight month with a $2.7 billion—or 1.4 percent—gain to $196 billion, following a 2.1 percent March increase and were up 6.2 percent year-over-year.

These sequential and annual increases are in line—to a large extent—with the rebounds currently occurring for other indices released in recent weeks, including:

-April retail sales, which include non-general merchandise like automobiles, gasoline, and restaurants, at $366.4 billion were up 0.4 percent from March, which was up 1.6 percent from February, and were up 8.8 year-over-year, according to the Department of Commerce. And total retail sales were up 9.6 percent year-over-year;
-the National Retail Federation reported that April retail sales (which exclude automobiles, gas stations, and restaurants) increased 0.5 percent seasonally adjusted over March and 4.6 percent unadjusted year-over-year;
-the Institute for Supply Manufacturing reported that its manufacturing index—also known as the PMI—came in at 60.4 percent, representing the ninth consecutive month that the PMI has eclipsed 50 (any reading 50 or over indicates growth), while adding that the overall economy has been on a growth track for 12 straight months. On an annual basis, it is significantly higher than the 40.4 percent PMI from April 2009;

“Even though the stock market is [down], all the indicators that talk to the economy say we are going to have a normal, cyclical recovery,” said Noel Perry, partner at FTR Associates, a freight transportation forecasting firm, and principal of Transport Fundamentals LLC. “When you get such an under buy in the economy as we have the last few years, it is normal for the economy to be strong for a while to make up for it.”

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About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman


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