US sales of big-ticket manufactured goods sank to their lowest level in three years in July as orders for civilian aircraft dropped sharply, government data showed on Friday (Aug 25).
Analysts had been expecting July to see a steep downturn following June's spike in sales at aircraft giant Boeing. But the overall decrease was more than enough to reverse the gains recorded in June.
Durable goods orders have now been down for three of the last four months, possibly weighing on economic growth.
Analysts said however that through the volatility the report showed some solid gains.
Total orders for durable goods fell 6.8 per cent from June to US$229.2 billion, the biggest one-month drop since August of 2014. Analyst had been expecting a fall of only six percent.
Year-to-date, however, orders were still five percent higher than they were for the first seven months of 2016. Civilian aircraft fell 70.7 per cent for the month, after June's 129.3 per cent gain.
Excluding the volatile transportation segment, however, orders rose 0.5 per cent, the third monthly rise in a row.
The defence sector was July's strongest point. Excluding defence goods, orders fell an even steeper 7.8 per cent.
Orders for military aircraft rose 47.8 per cent while defence capital goods gained 14.7 per cent. Pointing to a continuing recovery in the oil drilling sector, non-defence capital goods orders rose 0.4 per cent.
Computers and electronic products also had their strongest sales in a year, adding 1.6 per cent.
But sales of cars and car parts, which have had a weak first half of 2017, fell 1.2 per cent, the largest monthly decrease since May of 2016.
Ian Shepherdson noted that capital goods orders outside the aircraft sector had been up for three of the past four months.
"The recent trend here has been a bit stronger than implied by the path of oil prices, which has been the dominant factor in recent years," he said in a research note.
Although "wildly volatile," aircraft orders appeared to be slowly rising, he added.
Source: AFP/ec
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