Volatile Durable Goods Orders Mask Strong Economic Trends

Orders for non-defense aircraft dropped 67.1% in March, but a closer look reveals a more nuanced picture, with year-to-date numbers up 71.6% compared to last year. Meanwhile, durable goods orders for other industries, such as machinery and computers, showed significant increases, indicating growing confidence in capital spending and a strengthening economy.

Key Takeaways:

• Non-defense aircraft orders experienced a volatile 67.1% drop in March, but year-to-date numbers are up 71.6% from last year, indicating a strong long-term trend.
• Boeing and Textron, makers of smaller aircraft, are not significantly impacted by the monthly fluctuations in orders.
• Aerospace firms receive a substantial portion of their orders from the Pentagon, with defense aircraft orders rising 2.0% in March after a 20.6% decline in February.
• Orders for machinery rose 8.6% in March, with a year-to-date increase of 11.7% indicating growing confidence in capital spending.
• Computer orders jumped 12.9% in March, with a year-to-date increase of 10.5%, benefiting firms like Hewlett-Packard, Intel, and Western Digital.
• Rising orders for computers and machinery suggest a more significant economic recovery than initially apparent.
• Zacks Equity Research provides continuous coverage of 1,150 publicly traded stocks, with analysts organized by industry to offer in-depth analysis.

Statistics:

• Non-defense aircraft orders dropped 67.1% in March, but are up 71.6% year-to-date.
• Defense aircraft orders rose 2.0% in March, after a 20.6% decline in February.
• Orders for machinery increased 8.6% in March, with a year-to-date increase of 11.7%.
• Computer orders surged 12.9% in March, with a year-to-date increase of 10.5%.

Sources:

• http://www.zacks.com/
• http://at.zacks.com/?id=4579
• http://at.zacks.com/?id=5514
• http://at.zacks.com/?id=5516
• http://at.zacks.com/?id=4580