October 2016 Economic Indicators

Melanie Garza - Director of Strategy and Growth


Durable Goods Remains Flat, Defense Spending Increases

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The Department of Commerce reported orders for durable goods fell flat in August with a measurement of just 0.2% following an increase of 1.4% in July. Economists had predicted orders would fall as much as 1.5%.

The increase in July was largely attributed to a spike in transportation with orders up 8.9%.  Government orders for aircraft and military surged 20.7% in July and another 24.2% in August, while the demand for commercial aircraft sunk 22% in August.  The automotive industry has remained flat the last two months.

Orders for non-transportation related durable goods fell 0.4% in August.  Demand declined for heavy machinery, computers and electrical equipment.

Capacity Utilization Falls

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Capacity utilization for industrial production fell 0.4% in August to 75.5%.  Industrial production decreased 0.4% in August after rising 0.6% percent in July. Total industrial production in August was 1.1% lower than one year ago.

The operating rate for nondurables fell 0.2% while the rates for durables and for other manufacturing (publishing and logging) dropped 0.5%.

Major industry groups’ current capacity utilization versus one year ago rates are as follows:  Primary metals is currently 69.9% compared to 70.4% in Q4 15; fabricated metal at 78.7% versus 79.4%; machinery at 71.9% compared to 72%; electrical equipment is 82.7% compared to 84.8%; automotive is 84.1% versus 81% last year; and aerospace remains at 81% over the last year.

Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com