New orders for durable goods were very strong once more in June, driving the annualised quarterly pace of growth to a very solid 28.7%. Surprisingly, the strength is particularly marked for the defence aircraft industry that should have suffered from the implementation of the sequester. Q2 growth could prove a disappointment, but the case for strong H2 is building up Les nouvelles commandes à l’industrie des biens durables ont une fois de plus été très dynamiques en juin, amenant la croissance annualisé au T2 à 28,9%. L’industrie de l’aviation militaire est particulièrement dynamique, une surprise en ces temps de coupes budgétaires généralisées. Si la croissance au T2 pourrait décevoir, un fort rebond au S2 est de plus en plus probable
■ New orders of manufacturing durable goods have been on a very solid trend over the past three months, up 4.2% m/m in June, after +5.2% in May and 3.6% in April. In Q2, they were up by an annualised 28.7%, markedly accelerating from -3.9% in Q1 and +15.4% in Q4 2012.
■ Rather surprisingly, as the sequester began being implemented during the quarter, new orders for defence goods showed particular strength, up an annualised 160.2% in Q2, after dropping 85.6% in Q1, mainly thanks to orders for aircrafts. The civilian aircraft industry was also very dynamic over the quarter.
■ Excluding defence and transportation, June new orders were less upbeat, down 1.6% over the month. However, the sub-component for capital goods, a rather good indicator for business investment, was more solid, with new orders up in June for the fourth month in a row.
■ Data for shipments were more mixed. This would tend to announce a poor reading for Q2 business investment in equipment and software – followed by a rebound as new orders are more solid. However, as of lately, the relationship between monthly and national account data has been shaky: according to the former, Q1 should have seen solid growth in business equipment, which the latter proved wrong.
■ As for manufacturing production prospects, today’s report is comforting as unfilled orders are piling up, which should boost production (and shipments) in the months ahead. This is even more likely that the pace of inventory building has been slowing rather markedly: this is likely to add to GDP growth in the second half of 2013, even if at the price of a low reading for Q2.
BY Alexandra ESTIOT
To Read the Entire Report Please Click on the pdf File Below.
■ New orders of manufacturing durable goods have been on a very solid trend over the past three months, up 4.2% m/m in June, after +5.2% in May and 3.6% in April. In Q2, they were up by an annualised 28.7%, markedly accelerating from -3.9% in Q1 and +15.4% in Q4 2012.
■ Rather surprisingly, as the sequester began being implemented during the quarter, new orders for defence goods showed particular strength, up an annualised 160.2% in Q2, after dropping 85.6% in Q1, mainly thanks to orders for aircrafts. The civilian aircraft industry was also very dynamic over the quarter.
■ Excluding defence and transportation, June new orders were less upbeat, down 1.6% over the month. However, the sub-component for capital goods, a rather good indicator for business investment, was more solid, with new orders up in June for the fourth month in a row.
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■ Data for shipments were more mixed. This would tend to announce a poor reading for Q2 business investment in equipment and software – followed by a rebound as new orders are more solid. However, as of lately, the relationship between monthly and national account data has been shaky: according to the former, Q1 should have seen solid growth in business equipment, which the latter proved wrong.
■ As for manufacturing production prospects, today’s report is comforting as unfilled orders are piling up, which should boost production (and shipments) in the months ahead. This is even more likely that the pace of inventory building has been slowing rather markedly: this is likely to add to GDP growth in the second half of 2013, even if at the price of a low reading for Q2.
BY Alexandra ESTIOT
To Read the Entire Report Please Click on the pdf File Below.
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