NAM Economist says exports/investments increased in June.
Press Release Summary:
David Huether, Chief Economist of the NAM, said exports and business investments, "may be picking up some momentum," following a report by the U.S. Department of Commerce. The report shows that new orders for manufactured durable goods increased by 0.8% in June, a quarter of which was caused by a 1.8% jump in orders for motor vehicles and parts. Other orders increased by 0.6%, while machinery and electrical equipment orders rose by 3%, accounting for 70% of the rise in orders.
Original Press Release:
NAM Sees Promising Trend in Durable Goods Order Rise
WASHINGTON, D.C., July 25, 2008 - Today's report from the U.S. Department of Commerce that orders for durable goods rose in June suggests that two key components of the economy, exports and business investment, "may be picking up some momentum," said David Huether, chief economist of the National Association of Manufacturers.
Commerce reported that new orders for manufactured durable good increased by 0.8 percent in June, the largest rise in four months, while May orders were revised slightly upward as well. "Over the past year, business investment has slowed to a standstill while the growth of exports was decelerating," Huether said. "Today's report points to improvements in these important sources of economic growth."
About a quarter of last month's rise was caused by a 1.8 percent jump in new orders for motor vehicles and parts, which was likely aided by the end of the American Axle strike in May. Even so, outside of motor vehicles, orders increased a solid 0.6 percent in June.
"The main drivers of the increase in new orders last month were machinery and electrical equipment," Huether said. "Together, new orders for these products rose by 3 percent in June and accounted for fully 70 percent of the rise in overall new orders last month.
"With the bulk of these products destined for either domestic business investment or foreign markets, today's report signals that these components of the economy gained some momentum as the economy heads into the second half of the year," Huether said. "This is especially good news for the manufacturing sector which, in the second quarter of this year, experienced the biggest output decline since 2001."
The National Association of Manufacturers is the nation's largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in Washington, D.C., the NAM has 11 additional offices across the country. Visit the NAM's award-winning web site at www.nam.org for more information about manufacturing and the economy.
