Manufacturing orders for some equipment slowed in the United States in July, but only slightly. New orders for manufactured durable goods — products meant to last at least three years — fell less than $0.1 billion, or virtually unchanged, to $273.5 billion, the U.S. Census Bureau said on Wednesday.
The market expectation was for an increase of 0.6%, following June's revised 2.2% month-on-month increase. New orders had increased each month since February.
Shipments, inventories, and unfilled orders all rose in July, as they have nearly every month since the start of the pandemic.
The drop in durable goods orders was due to a 0.7% decline in orders for transportation equipment. Excluding transportation, new orders increased 0.3%. Unfilled orders for transportation equipment, up seventeen of the last eighteen months, rose 1%, to $655.2 billion.
The value of core capital goods orders, business investment in equipment that excludes aircraft and military hardware, rose 0.4% after a revised increase of 0.9% in June.
The lower-than-expected July orders number followed a drop in the U.S. purchasing managers’ index from S&P Global reported on Tuesday. The index showed the measure of manufacturing business activity dropping to 51.3 in August after a July reading of 52.2.
Despite higher input and labor costs from inflation, many manufacturing businesses have performed well post-pandemic. Second-quarter data from the U.S. Department of Labor showed productivity increased 6% in the durable manufacturing sector, as output rose and hours worked declined.
Industrial production overall rose in the U.S. in July. Manufacturing output rose 0.7%, boosted by a large jump (6.6%) in the motor vehicles and parts sector.
July data from equipment financiers indicated new business volume was up 2% in July, to $10.1 billion. Year-to-date, cumulative new business volume was up 5% compared with 2021, said The Equipment Leasing and Finance Association.
Michael Romanowski, President of Farm Credit Leasing, said: “We continue to see robust interest from agribusinesses and producers as they look to expand operations and lock in low long-term rates. Demand is outstripping supply as we continue to experience equipment delivery delays due to continued supply chain challenges."