Major goods orders slip

Demand for autos, other durables off for first time in 5 months

`Still looks pretty good'

Analysts say 1.3% dip last month is a pause rather than slowdown

October 28, 1999|By BLOOMBERG NEWS

WASHINGTON -- U.S. durable goods orders fell last month for the first time in five months, government figures showed yesterday.

Orders for higher-priced, long-lasting goods such as automobiles, machinery and weapons decreased 1.3 percent last month to $204.9 billion, the Commerce Department said. Analysts said the decline, after a 1 percent increase in August, signaled a pause rather than a slowdown in manufacturing.

"Once you take out aircraft, the report is still consistent with more growth," said David Wyss, an economist at Standard & Poor's DRI in Lexington, Mass. "Manufacturing still looks pretty good."

The decline is the first since orders fell 2.4 percent in April. Even so, orders were 5.6 percent higher last month than a year earlier. Economic recoveries in Asia and Europe have boosted demand for U.S. exports and helped keep the U.S. economic expansion on track to become the longest ever in January.

Orders for aircraft and aircraft parts dropped 17.9 percent last month, Commerce figures showed.

Orders for motor vehicles and parts also declined as DaimlerChrysler AG and General Motors Corp. assembly plants were unable to get components as Hurricane Floyd moved along the East Coast the week of Sept. 12.

The decline in orders for automobiles last month "reflects some impact of Hurricane Floyd in September, but also a shift in consumer demand to light trucks after relatively stronger car sales earlier in the year," said Paul Taylor, chief economist at the National Automobile Dealers Association in McLean, Va.

While auto orders declined last month, sales of cars and trucks increased almost 10 percent as the annual industry selling rate advanced to a record pace for the eighth consecutive month.

This month will be the first since January in which sales of pickup trucks, sport utility vehicles and minivans will exceed sales of regular sedans, according to Luckey Consulting Group. The demand for those more-expensive vehicles and the switch to a new model year has caused shortages.

The decline in durable goods was offset by the fourth consecutive rise in orders for electronic goods, and gains in orders for industrial machinery and military equipment.

Nondefense capital goods excluding aircraft -- a gauge of business investment plans -- rose 3 percent last month after falling 1.3 percent in August.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.