The 4.0% m/m rise in durable goods orders in March was entirely due to a sharp rise in transportation orders and suggests that business investment in equipment remains weak.Meanwhile, orders excluding transportation fell 0.2%. This is the sixth consecutive decline and was driven by a 1.5%m/m fall in machinery orders. While this may be partly due to some lingering disruption from the extremely cold winter in the North-East, the prolonged weakness in orders suggests that other factors such as the stronger dollar are continuing to affect firms. “Overall, this suggests that the outlook for business investment in the second quarter has not improved. But with consumption likely to rebound strongly as temperatures have returned to seasonal norms, we think GDP growth will still rebound in the second quarter.” says Capital Economics in a report
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