August 2015 Economic Indicators
Melanie Garza - Director of Strategy & Growth
Demand for Durable Goods Climbs
New Orders for durable goods rose in June following two consecutive declining months. In June, the index climbed 3.4% to $234.9 billion bringing the total back up where it was in March. Durable goods orders are up 2.9% over 2014.
Transportation equipment, also up following two consecutive monthly decreases, led the increase, with a 9.3% gain. Overall new orders fell slightly in June, but transportation is up 8.4% over last year. Compared to 2014, construction equipment orders are up 36.1%, automotive up 8.4%, heavy trucks up 23.2% and commercial aircraft up 18.2%. Demand for farm machinery; however, is down -42.5%.
Orders for industrial machinery grew 5.4% in June, but remain -7.9% lower than a year ago. Primary metals continued to fall, but at a much slower rate of just -.4% in June compared with -.8% in May and -2.4% in April. Demand for computers, electrical equipment, appliances, and components remained relatively flat.
New orders for manufactured nondurable remained relatively flat at a .4% increase to $243.6 billion.
GDP Falls Short, Consumer Spending Rises
GDP for the second quarter increased at an annual rate of 2.3%, falling .5% below economists’ forecast. In the first quarter of 2015, GDP inched up just .6%.
Consumer spending; however, is on the rise with total consumption expenditures up 2.9% for the quarter following a 1.8% rise in the first. Durable goods purchases shot up 7.3% in the spring, compared with a 2% increase earlier this year. Nondurable goods also increased 3.6% after only a .7% growth rate in the first quarter. Fixed investments in residential properties have grown 16.7% this year.
On the nonresidential side fixed investments slipped .6% after a 1.6% increase in Q1. Buildings fell another 1.6% on top of a 7.4% decrease in the first quarter. Equipment investments dropped 4.1%, in contrast to an increase of 2.3% earlier this year. On a good note, investments in intellectual property products are surging in 2015 with growth of 7.4% in the first quarter and 5.5% in the second.
State and local government spending rose 2% in the second quarter while federal government expenditures fell 1.1%.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com.