The controls for the business equipment decreased in December by the most in 10 months, a sign of US companies been slashing capital investment even before the turmoil in global financial markets.
bookings for non-defense capital goods excluding aircraft fell 4.3 percent last month after falling 1.1 percent in November, which was previously reported as down 0.3 percent, data from the Commerce department showed Thursday. Orders for all durable goods - products meant to last at least three years - fell 5.1 percent, the most since August 2014, reflecting a large decline
The equipment spending may remain depressed as a further decline in oil. prices prompt energy companies to pull back. In addition, US exporters continue to struggle against the slowdown in global demand and a stronger dollar.
"It is a miserable report across the board," said Brian Jones, senior US economist at Societe Generale in New York. "It is a reflection of what happens in industries tied to oil and all those related to the activity abroad -. Their activity is down"
The median forecast of 80 economists surveyed by Bloomberg estimated orders for all durable goods fall 0.7 percent, with projections ranging from a decrease of 7 percent to an increase of 3.5. Bookings for capital goods excluding defense and aircraft - a proxy for business investment -. Were projected to slip 0.2 percent
Shipments of non-defense capital goods excluding aircraft, which are used to calculate gross domestic product fell by 0.2 percent in December after falling 1.1 percent the previous month. The Commerce Department releases its first estimate of fourth quarter GDP on Friday.
The trend of capital investment "is currently not particularly encouraging. We need to see a recovery in consumer demand in the first quarter, "said Jones.
Equipment Expenses
spending Material cooled over the last three months the year after rising 9.9 percent annualized pace in the third quarter, the highest since the same period in 2014.
companies placed fewer orders for communications equipment, computers, machinery and transport equipment. the only increases were in primary metals and electrical equipment.
commercial aircraft orders slumped 29.4 percent in December after falling 23 , 3 percent a month earlier. industry data do not always correlate with the government statistics on a month to month basis. Boeing Co., the aerospace company based in Chicago, said it received 223 orders for aircraft last month, the most in a year.
Minus Transportation
Excluding transportation equipment, which often fluctuates from month to month, bookings decreased 1.2 percent in December, the report showed .
orders for military equipment fell 34.4 percent last month, while demand for non-defense products fell 2.9 percent after a decline of 2 percent.
Thursday's report says the companies are making progress paring stocks after stocks earlier this year exceeded demand. stocks durable goods rose 0.5 percent, the most since the end of 2014.
The fall in crude oil prices prompted producers to reduce investment. Hess Corp., a producer of oil and natural gas based in New York, quoted lower oil prices when it said this week it will cut capital spending on exploration and production by 40 percent ago a year to $ 2.4 billion.
soft global growth outlook also weighed on the capital expenditure projects that the economies of China and other emerging markets and slow domestic demand shows signs of fatigue.
Bloomberg
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