US March durable goods orders may signal end of manufacturing downturn

Orders for goods made to last more than three years jumped last month, amid widespread increases in those for transportation equipment.

According to the US Department of Commerce, durable goods orders grew at a month-on-month clip of 2.7% to reach $258.52bn.

Total orders excluding those for transportation increased by 0.4% versus March (consensus: 0.3%), while excluding Defence they were up by 2.3%.

The biggest gains in orders were seen in those for computers and electronic products, communications equipment, together with motor vehicles and parts, non-defence aircraft and parts and defence aircraft parts.

In total, orders for transportation equipment rose by 7.0% on the month to $93.79bn.

Versus a year ago, total durable goods orders were 3.0% higher.

At the so-called 'core' level, which excludes orders for both civilian aircraft as well as defence, orders were 1.3% higher on the month at $69.98bn and 2.8% stronger year-on-year.

Commenting on the latest figures from Commerce, Ian Shepherdson, chief economist at Pantheon Macroeconomics said the jump in orders for civilian jets in Thursday's report was hard to square with the latest reading on the ISM institute's manufacturing sector gauge, adding that the series was volatile from one month to the next and might yet be revised down "substantially".

Nonetheless, "for now it is a very welcome surprise, adding to the evidence that the manufacturing downturn is coming to an end, a bit sooner than we had anticipated."