A rising national order total can point businesses toward the wrong demand signal if they ignore its composition. January durable-goods orders rose 1.8 percent, the Census Bureau reported on February 27, 2017. Transportation-equipment orders increased 6.0 percent to $76.4 billion, while orders outside transportation declined 0.2 percent. The aggregate therefore did not describe a common direction across those two groups. [CB 17-25 M3-1 (17)-01][CB 17-12 M3-1 (16)-12]

The earlier January 27 release had presented the reverse contrast for December: transportation-equipment orders fell 2.2 percent while orders excluding transportation rose 0.5 percent. Those are the December advance estimates, not a final series updated to February's vintage. Reading the two releases together makes sector composition visible without treating two publications of the same Census survey as independent confirmation. [CB 17-25 M3-1 (17)-01][CB 17-12 M3-1 (16)-12]

For a business weighing where to seek customers, our market interpretation is to match the signal to its potential buyers before allocating effort. A supplier outside transportation cannot read the overall rebound as evidence that its own market expanded. Equally, the ex-transport decline does not erase the increase reported for transportation. Neither release measures competitive entry, margins or the incentives of a particular company. [CB 17-25 M3-1 (17)-01][CB 17-12 M3-1 (16)-12]

The measures are seasonally adjusted nominal order values, net of cancellations and excluding semiconductor manufacturing. They are not inflation-adjusted volumes, and the non-probability survey panel cannot yield ordinary sampling-error confidence intervals. January shipments also fell 0.1 percent, so the order rise should not stand in for completed deliveries. The useful commercial test is whether a firm's own customer enquiries and commitments match the relevant sector signal, rather than whether the national headline sounds encouraging. [CB 17-25 M3-1 (17)-01][CB 17-12 M3-1 (16)-12]

Source documents

  1. Advance report on durable goods, January 2017https://www.census.gov/manufacturing/m3/historical_data/pressreleases/adv/2017/jan17adv.pdf
  2. Advance report on durable goods, December 2016https://www.census.gov/manufacturing/m3/historical_data/pressreleases/adv/2016/dec16adv.pdf