New orders for core capital goods increased slightly for the first month of 2024, as core capital goods showed strength despite a decline in durable goods as a whole.
January’s seasonally adjusted value of core capital goods orders, which excludes aircraft and defense equipment, landed at $73.7 billion, an increase of 0.1% month over month following a revised 0.6% decline in December, according to the Monthly Advance Report on Durable Goods Manufacturers’ Shipments Inventories and Orders, released by the U.S. Census Bureau today.
Seasonally adjusted shipments for core capital goods landed at $74.8 billion in January, up 0.8% MoM.
Seasonally adjusted new orders for manufactured durable goods decreased for the second straight month, coming in at $276.7 billion in January, down 6.1% MoM after a revised 0.3% decline in December. Seasonally adjusted shipments for manufactured durable goods were $279 billion, down 0.9% MoM.
While durable goods’ performance showed weakness to start the year, there is reason for cautious optimism, according to a Wells Fargo Research note.
“The data thus suggest a weak start to Q1 for equipment investment, though the trend in nondefense shipments excluding air is encouraging and suggests activity may hold up if we see a rebound in aircraft next month,” according to the research note. “Still, today’s data suggest some downside risk to our estimate for real equipment investment to advance at a 0.6% annualized rate in the first quarter.”
A sluggish start to equipment investment in 2024 was not unexpected. The Equipment Leasing and Finance Foundation (ELFF) projected most equipment and software investment growth to come in the second half of the year in its U.S. Economic Outlook report. For the year, the ELFF projected a 2.2% growth in investment.
Equipment finance new business volume for January landed at $9.3 billion, up 6% year over year, according to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index.
Seasonally adjusted unfilled orders for core capital goods landed at $268.5 billion in January, down 0.4% compared with December, according to Census Bureau data. Seasonally adjusted total inventories for core capital goods landed at $163.3 billion in January, down 0.1% MoM.
The report stems from the U.S. Census Bureau’s Manufacturers’ Shipments, Inventories and Orders (M3) survey, and represents about 3,100 companies’ changes in production, the bureau previously told Equipment Finance News.
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