New orders for manufactured durable goods fell $35.4 billion in April to $170 billion according to the latest information from the Department of Commerce. The drop represents a 17.2% plummet, following March’s 16.2% drop.
Transportation equipment, as a sector, saw the worst of the durable goods losses. New orders of transportation equipment fell almost 50% to $26.6 billion from $50.5 billion, a loss of $23.9 billion. Private sales of transportation equipment like ground vehicles and aircraft cratered during March and April as U.S. citizens under stay-at-home orders eschewed travel for pleasure and nonessential work.
Shipments of durable manufactured goods in April fell by $41.5 billion, or 17.7%, to $192.3 billion, extending and increasing March losses of 5.5%. Shipments of transportation equipment accounted for $31.4 billion of the loss as it fell 42.7% to $42.1 billion.
Unfilled orders fell by about 1.6% after it fell 2.1% in March, led again by transportation equipment, which saw unfilled orders drop by 2%. Inventories increased in April slightly by 0.2% after dropping by 2.1% in March. Transportation equipment led the trend again here as inventories there increased by 0.3%.
New orders for nondefense capital goods in April rose 8.2% to $50.1 billion. Shipments fell 12.6%, unfilled orders fell 2.2%, and inventories increased by 0.1%.
The survey, issued monthly by the Census Bureau, represents responses from about 3,100 companies, including diversified large companies, large homogeneous companies, and single-unit manufacturers.
The drop in new orders and shipments of transportation goods is consistent with the sharp contraction seen at large transportation manufacturers like Boeing, GE Aviation, General Motors, Fiat-Chrysler Automobiles, and Ford.
Boeing and GE Aviation have taken decisive action to cut their workforce significantly in order to readjust to the economic impact on airlines, which have cancelled orders for new planes as fliers stay home instead. Boeing, after recording no new sales at all in April, recently announced it would begin implementing involuntary layoffs. Of the major U.S. automakers, only General Motors escaped losing money in the first quarter of 2020, while Ford and Fiat-Chrysler each lost more than $1.8 billion during the first quarter of the year.
