Preview: Due June 25 - U.S. May Durable Goods Orders - Aircraft to correct lower, but ex transport trend positive
We expect May durable goods orders to fall by 4.0% overall after a rise of 8.0% in April, the moves led by volatility in aircraft. Ex transport we expect an increase of 0.8%, slightly slower than three straight gains in excess of 1.0%, but maintaining a positive trend.
Boeing data suggests a significant decline in civil aircraft orders after a strong April. We expect only a marginal increase in auto orders. A strong month from defense, which has a large overlap with transport, is likely. We expect orders ex defense to fall by 5.4% after rise of 8.1% in April.
The underlying picture remains positive, supported by heavy investment in AI. ISM manufacturing orders however accelerated further in April. However, with manufacturing output taking a pause in May within a positive trend, we expect a modest slowing in May ex transport orders.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to increase by 1.%, in a return to trend after 1.0% April decline corrected an exceptional 3.8% increase in March. Computers and electronics are likely to show a similar picture.
