MAPI Analysis on Durable Goods: Manufacturing Sector Growth Decelerates
The following is an analysis from Don Norman, Ph.D., Senior Economist for the Manufacturers Alliance for Productivity and Innovation (MAPI), regarding the durable goods report for May 2012:
“Durable goods orders increased 1.1 percent in May, well above the consensus estimate of a 0.5 percent gain,” Norman said. “The increase reverses two consecutive monthly decreases. In addition, it runs counter to increasing signs in recent months that manufacturing activity hit a brick wall early in 2012 as growth slowed in response to the rise in oil prices in the first quarter of 2012, continuing economic problems in the Eurozone, and even slowing growth in China.
“There are caveats, however,” Norman added. “Much of the increase was due to a 2.7 percent increase in transportation orders. When transportation orders are excluded, durable goods orders increased by just 0.4 percent. Further the monthly durable goods orders series is volatile and a one-month gain does not constitute a trend. The June data on durable goods orders indicate that overall manufacturing sector growth continues, but at a markedly slower pace than recorded at the end of 2011 and the first two months of 2012.”