WASHINGTON (Reuters) - New orders for long lasting U.S. manufactured goods probably rose for a second straight month in August as stronger demand for automobiles offset a drop in commercial aircraft orders, according to a Reuters survey.
The poll of 75 economists forecast new orders rose 0.5 percent month-on-month after surging 5.1 percent in July. Industry data show the world’s No. 2 plane maker, Boeing Co, (BA.N) took fewer orders for commercial aircraft than in July.
The impact of the decline on overall new orders was seen cushioned by strong demand for motor vehicles, with auto dealers moving to beef up depleted stocks following the government’s popular “cash for clunkers” program.
That scheme gave drivers a discount to trade-in their old fuel guzzling automobiles for new, economic vehicles. It ended in August.
Excluding transportation, new orders are expected to have increased 1.0 percent month-on-month in August after rising 1.1 percent in July. Such an outcome would reinforce views the U.S. economy was recovering from its worst recession in 70 years.
The recession started in December 2007.
“Business equipment investment is kicking into gear and should be a positive contributor to growth in the third quarter of 2009,” wrote economists at IHS Global Insight in a note.
Following are some analyst forecasts and comments on August durable goods orders:
Forecast: New orders +1.0 percent
ex-transport +1.5 percent
“A wide variety of indicators show that the manufacturing rebound that began in July continued into August and September. We expect that nondefense ex-aircraft capital goods orders resumed their increase in August. The transportation sector should be a drag on orders, as industry data point to a fall in aircraft orders. Motor vehicle orders probably increased.”
Forecast: New orders +0.5 percent
ex-transport +0.8 percent
“The rebound in durable goods orders is likely to continue in August. Admittedly, Boeing took 32 orders for new commercial aircraft last month, less than the 44 orders received in July. Excluding transportation, orders may increase by around 0.8 percent. That would be the fourth monthly gain in core orders in a row and would suggest that the industry is enjoying a rebound in demand associated with the pick-up in world trade and the lower dollar.”
Forecast: New orders -0.7 pct
ex-transport +1.5 pct
“Although automotive production drove the factory sector out of recession, increasing activity is evident throughout the sector. However, this vigor is unlikely to translate to the dollar value of new orders, because Boeing reported lower bookings in the month. Nevertheless, ongoing gains in the auto sector should lessen the slide in total transportation orders, which, along with the building order books elsewhere.”
Reporting by Lucia Mutikani; editing by Padraic Cassidy