Durable goods orders to remain cool outside of transportation

Durable goods orders likely rose by 0.8% mom in March. Aircraft orders are expected to contribute 0.6% to the overall increase. 

Although Boeing reported a decline in overall aircraft orders in March (from 72 to 39), there was a bias toward significantly larger and more expensive jets. 

"As a result, we estimate that aircraft orders were up 21% on seasonally adjusted basis. Outside of transportation, the picture appears to be less robust and we forecast only a 0.2% mom increase in ex-transportation orders and flat core capex orders (excluding defence and aircraft)", Says Societe Generale

The orders component of the ISM index continued to decline in March and is currently at its lowest level since May 2013. Industrial production was weak and March as well and early manufacturing surveys for April offered a mixed picture. 

It is believed that the sector is still adjusting to weak consumer demand in the early months of the year and that this weakness will be reversed as we move into spring and summer months. However, the report is likely to be consistent with a weak contribution from business investment to Q1 GDP figure.