New orders for manufactured durable goods continued to rise in February due to a boost in machinery and commercial aircraft purchases, strengthening the stability of the manufacturing recovery.

Continuing a positive trend, orders for durable goods — which include automobiles, appliances and machines — rose again last month, indicating gradual improvements in product demand and strengthening prospects for both the manufacturing industry and the general United States economy.

According to a report last week from the U.S. Department of Commerce, new orders for durable goods rose $0.9 billion to $178.1 billion in February. This was the third consecutive month of growth in new orders and represented a 0.5 percent increase over durable goods orders in January, which saw a 3 percent increase.

Machinery orders, which have been up for three of the last four months, saw the largest increase in February, rising $1.1 billion, or 4.7 percent, for a total of $23.3 billion. Declines in orders for motor vehicles and parts were partially offset by a 32.7 percent increase in non-defense aircraft orders, following a 134.9 percent surge in January.

Excluding transportation goods, February durable goods orders climbed 0.9 percent, according to the Commerce Department’s latest report. Excluding defense-related goods, new orders increased by 1.6 percent.

The current economic rebound “has been helped significantly by rising demand for factory goods,” the Associated Press says. “American manufacturers are benefiting not only from increased domestic demand, but rising orders from overseas.”

However, the Commerce Department also found that durable goods shipments dropped 0.6 percent last month, the second consecutive month of decline. Meanwhile, unfilled orders rose 0.4 percent and inventories increased 0.3 percent, also for the second month in a row.

Non-defense orders for core capital equipment climbed 5.2 percent, while shipments rose 0.3 percent.

“In spite of severe weather and the supply chain implications of Toyota’s difficulties, new orders for long-lasting goods registered solid gains on a monthly and year-over-year basis in February,” Cliff Waldman, an economist for the Manufacturers Alliance/MAPI, wrote in an analysis of the report.

“Broadly distributed industrial gains, with machinery as well as primary and fabricated metal products demand all registering modestly strong advances, suggests that the manufacturing output recovery, which began in the summer of 2009 and whose strength has been propelled by a sharp inventory swing as well as fiscal stimulus measures, remains sustainable, at least over the short term,” Waldman added.

Despite the gains, the February durable goods increase was lower than many experts had forecast. Economists recently polled by Reuters expected a 0.7 percent in orders for the month, while MarketWatch anticipated a 1.7 percent gain.

Although durable goods orders fell short of earlier expectations, demand continues to grow. “Economists said that momentum was probably sustainable in the short term, but could weaken later in the year as government stimulus programs end and restocking slows,” the New York Times reports.

Broader economic stability depends in large part on consumer confidence, which is a driving factor of sales and consumption. The Conference Board’s latest Consumer Confidence Index, released yesterday, rebounded to 52.5 in March from 46.4 in February, signaling a slight boost in consumer confidence for the future.

“However, despite this month’s increase, consumers continue to express concern about current business and labor market conditions,” according to Lynn Franco, director of The Conference Board Consumer Research Center. “And their outlook for the next six months is still rather pessimistic. Overall, consumer confidence levels have not changed significantly since last spring.”

Earlier

Durable Goods Orders Rise in January

Resources

…Durable Goods Manufacturers’ Shipments, Inventories and Orders: February 2010
U.S. Department of Commerce, March 24, 2010

February Durable Goods Orders Up 0.5 Percent
by Martin Crutsinger
The Associated Press, March 24, 2010

MAPI Analysis on Durable Goods Report: ‘Solid Gains’
by Cliff Waldman
Manufacturers Alliance/MAPI, March 24, 2010

U.S. Durable Goods Orders Rise 0.5 pct in Feb
by Lucia Mutikani
Reuters, March 24, 2010

Durable Goods Orders Rise for 3rd Straight Month
by Rex Nutting
MarketWatch, March 24, 2010

New Home Sales Weaken in February
by Javier Hernandez
The New York Times, March 24, 2010

The Conference Board Consumer Confidence Index Rebounds in March
The Conference Board, March 30, 2010