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U.S. Capital-Equipment Orders Rise in Sign of Resilient Demand


Friday, 25 May 2018 19:49 WIB

Core Durable Goods


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Orders placed with U.S. factories for business equipment rebounded in April even as the prior month's figure was revised downward, indicating resilient demand at the start of the second quarter, Commerce Department figures showed Friday.

Outside of declines in machinery and civilian aircraft, the gain in orders was fairly broad-based, spanning computers, electrical equipment and metals. While the figures are typically volatile, the latest report indicates business spending continues to expand at a healthy pace.

Business investment, joining consumer spending, may help support a projected rebound in economic growth this quarter as demand gets a boost from lower taxes for companies and individuals. At the same time, rising input costs, along with President Donald Trump's tariffs on imported metals and threats of other levies, pose risks for corporations’ investment plans.

Aircraft orders weighed on total bookings: Boeing Co., the Chicago-based aerospace company, said it got 78 orders for aircraft in April, down from 197 the prior month. Friday's government report showed that orders for civilian aircraft and parts fell 29 percent in April after surging 60.7 percent in March.

According to GDP figures released in April, spending on business equipment rose at a 4.7 percent annualized pace in the first quarter, after surging 11.6 percent in the previous three months. It accounted for 5.8 percent of nominal GDP.

Source : Bloomberg


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