In a recently released report on January 2013's durable goods orders, the U.S. department of commerce signaled there may be some room for optimism about the manufacturing sector.
Orders for core capital goods, comprised of things like machinery and computers, were up 6.3 percent in January of 2013. Growth in that sector was more weighted towards industrial machinery, which saw orders spike up 13.5 percent from December of 2012, as opposed to computers, which actually saw orders decline by 5.3 percent. An increase in core capitol goods can be taken as a sign that private industry is investing as a precursor to expected higher orders.
"This was a really strong report as it indicates that businesses felt confident enough to order a ton of big ticket items in January," said Joel Naroff of Naroff Economic Advisors.
Overall, durable goods orders decreased 5.2 percent, dragged down largely by transportation. Declines were particularly sharp in aircraft orders–on the commercial side, orders declined 35 percent, while on the defense side, orders declined 64 percent. Not including transportation figures, durable goods orders actually climbed by 1.9 percent in January of 2013.
Durable goods are items intended to last for three or more years, and rising orders are understood to be an indicator of improving economic health.
Content provided by executive search organization, MRINetwork.