US durable goods orders fell by 17.2pc in April from a month earlier, with automotive and vehicle parts makers accounting or the bulk of the declines.
Automotive and vehicle parts orders declined by 52.8pc because of shutdowns induced by the COVID-19 pandemic, while non-defence aircraft orders fell by 46.9pc in April from March.
However, according to ING, which cited Census Bureau data, these declines were lower than expected, falling by a little more than half of the anticipated 10pc in April.
However, the report cautions the relatively smaller dip could be short-lived, especially since manufacturers working with lower capacity utilization have increasingly chosen to use older equipment rather than replacing it. In the medium-term, this could impact new orders for machiner,y as well as scrap flows from old equipment.
On the other hand, the automotive industry’s orders are expected to increase following factory restarts earlier this month, leading to a swift recovery in car sales and higher demand on the automotive production side, ING indicated.