Analysts at Nomura expect a modest 0.3% m-o-m decline in May for US durable goods orders excluding transportation equipment.
Key Quotes
“The May industrial production report indicated the production of ex-auto business equipment fell, led by declines in the output of information processing and industrial equipment, and pointed to increased downside risk to Q2 equipment spending. Thus, we would not be surprised to see a slowdown in ex-transportation durable goods orders and in non-defense capital goods orders excluding civilian aircraft in May. That said, we think any slowdown was likely transitory. Business sentiment indicators such as the ISM and Philly Fed surveys suggest continued growth in business in the manufacturing sector. Further, favorable tax provisions should continue to support business spending on equipment in the near term.”
“In addition, new orders of transportation equipment likely fell by about 1% considering slower auto assemblies in May. Volatile defense and non-defense aircraft orders likely rebounded, but may not have been enough to offset the decline in autos orders. Altogether, we expect 0.5% m-o-m decline in total durable goods orders.”
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