U.S. durable goods orders are likely to have declined in May on a reversal in aircraft bookings, said Societe Generale in a research report. In the previous month, durable goods order climbed 3.4 percent in due to a sharp increase of 65 percent in bookings for non-defence aircraft. This was unexpected as Boeing had registered a drop in the number of orders in April from March. It appears that the surge in bookings of non-defence aircraft reflected “catch up”.
When in March, Boeing’s orders had recovered to 69 from just 2 in February, the non-defence aircraft series instead declined 2 percent in March. In the following month, Boeing’s orders declined to 34 from 69. But the durable data rose sharply by 65 percent. Therefore, in spite of Boeing’s orders surging to 125 in May, the non-defence aircraft series might lag slightly and reflect the decline registered in April’s Boeing’s orders.
Excluding transportation, U.S. durable orders might have increased 0.5 percent after a small rise of 0.3 percent in April, noted Societe Generale. Meanwhile, non-defence capital goods orders, stripping aircraft, might have also recovered by 0.5 percent. Still, this category is down 4.4 percent year-on-year, as business investment continues to get weaker, said Societe Generale.
