US Factory Orders Stall in February, Business Conditions Deteriorate in March
The manufacturing and industrial sectors have been weakening in the US throughout 2019, while these two sectors fell into contraction in major economies in the rest of the globe. January’s and February’s figures from the US manufacturing shows just that, so the situation was bad even before coronavirus. Now things will get horrible. Below is the factory orders report from the US for February:
Factory Orders Report
- February factory orders 0.0% vs +0.2% expected
- January stood -0.5%
- Core factory orders, excluding transport at -0.9% vs -0.1% previously
Durable Goods Orders Revisions
- Durable goods orders +1.2% (no changes)
- Core durable goods orders excluding transport -0.6% (no changes)
- Capital goods orders non-defense ex air -0.9% vs -0.8% initially
- Capital goods orders non-defense ex air -0.8% (prior was -0.7%, revised to -0.8%)
So, factory orders turned negative in January and they fell flat in February. This shows that business investment was stuck in a long-term slump, even with a decent economy. It’s tough to ever see it coming back now and the data from March onwards will be pretty horrible.
New York ISM Business Conditions Report
- ISM New York business conditions 12.9 vs 51.9 prior
- February was 51.9
- Index at 849.3 vs 867.9 prior
- Employment 36.7 vs 49.3 prior
- Six months outlook 37.9 vs 53.8 prior
As the ISM report for business conditions in New York shows, the situation has turned quite dire in March, so factory orders and everything else will post some major declines in march. This is a record low for the ISM indicator and it should get even lower in April. Brace yourselves, for a really cold winter is coming in spring, economically speaking.
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