A deep dive from Wolf Street, January 26:
The five-month surge is a sign of strong business investment, partly driven by the AI infrastructure buildout.
Orders for durable goods reported by manufacturing plants in the US fired on all cylinders in November, rising by 5.3% from October and by 12.3% year-over-year, including huge orders for civilian aircraft, a very volatile component, according to data from the Census Bureau today.
Orders for core capital goods (“nondefense capital goods excluding transportation”) are particularly interesting because they reflect future investment expenditures by businesses and more broadly, domestic business conditions in the manufacturing sector.
Orders for core capital goods rose by 0.7% in November from October, by 3.7% over the past five months, and by 5.5% year-over-year, to a record of $78.4 billion.
Manufacturers of core capital goods include manufacturers of fabricated metals, machinery, computer and electronic products including semiconductors, electrical equipment, and others.
They’d shot out of the lockdown, amid shortages, distortions, and inflation from mid-2020 through August 2022, then declined for two years. But in mid-2024, they started rising again, and over the five months, they have surged and in November hit a new record, surpassing the old record of August 2022:
The surge in orders over the past five months is another signal of strong business investment fairly broadly, but also related to the buildout of AI infrastructure that has been going on for some time.
Orders for fabricated metal products rose by 1.0% in November from October, by 3.9% over the past five months, by 5.5% since March, and by 5.3% year-over-year, to a record $42.4 billion.
Industries in the Fabricated Metal Product Manufacturing category (North American Industry Classification System NAICS code 332) use processes such as forging, stamping, bending, forming, machining, welding, and assembling metals into intermediate or end products, other than machinery, computers and electronics, and metal furniture.
Also note the 8-month 5.5% surge since March....
....MUCH MORE
