CHICAGO Primary metal shipments rose slightly in May even as new orders declined compared with April, according to U.S. Census Bureau data. Metal fabricators also recorded a healthy improvement in shipments, but orders slipped.
Producers trimmed inventories by 0.8 percent in the same comparison, while fabricators inventories were basically unchanged, according to non-seasonally adjusted data.
Primary metal producers new orders of $26.17 billion last month, down 0.7 percent from April, ran counter to a year-to-date improvement of 0.6 percent to nearly $130.3 billion. Fabricators new orders were down 0.2 percent to $30.54 billion, but the five-month total of $154.15 billion was 3.2 percent ahead of a year earlier.
New orders for all manufactured durable goods in May increased 3.6 percent to $231.03 billion, seasonally adjusted. Transportation equipment ordersconsisting primarily of nondefense aircraft and partsled the overall improvement with a 10.2-percent increase.
Neither private aircraft nor defense goods "matter much for the near-term outlook as backlogs are very long, so removing them paints a far clearer picture of the prognosis," said Michael Montgomery, U.S. economist for Lexington, Mass.-based consultancy IHS Global Insight Inc.
"Excluding these wild segments yields a 0.6-percent May gain that piles on top of a 1.7-percent April performance to show some strength, but not enough to suggest robust gains in actual shipments that power the arithmetic of GDP (gross domestic product)," he said. "That leaves the durable goods segment growing anemically and the capital goods portion in lackluster shape. Neither domestic equipment nor capital goods exports are going to thrive in this environment, but they are not in decline."
Plodding GDP likely will prevail and big-ticket goods producers "will have to fight for every inch of ground," Montgomery said.