Orders for U. S. Durable Goods Excluding Transportation Equipment Probably Rose in March

Orders for U. S. Durable goods excluding transportation equipment probably rose in March, indicating manufacturing continues to contribute to growth, economists said before a government report today. Bookings for goods meant to last at least three years outside of aircraft and automobiles increased 0.5 percent after rising 1.8 percent the prior month, according to the median forecast of economists surveyed by Bloomberg News. Total orders probably dropped as demand for planes, which is volatile, pulled back after surging in February, economists projected. Rising demand for cars and auto supplies is supporting companies from 3M Co. (MMM) to Texas Instruments Inc., showing factories will underpin the expansion. Nonetheless, manufacturing will probably give way to service industries as a pillar of the expansion as slowdowns in Europe and China curb exports, while business investment cools after the strongest 10- quarter performance in a decade. “We’re still definitely on the recovery path, ” said Scott Brown, chief economist at Raymond James & Associates Inc. In St. Petersburg, Florida. “The slower global outlook should damp U. S. Exports to some extent. Domestic demand should be OK. ” The Commerce Department will report the durables figures at 8: 30 a. M. In Washington. Estimates for bookings excluding transportation of the 51 economists surveyed by Bloomberg ranged from little changed to a gain of 2.4 percent. Boeing Orders A decline in airplane bookings probably contributed to a drop in total demand, economists said. Boeing Co., the largest U. S. Aircraft maker, said it received orders for 53 planes last month, down from 237 in February. Orders for non-military capital goods excluding aircraft, a proxy for business investment in items such as computers, engines and communications gear, advanced 1 percent after a 1.2 percent gain the previous month, according to the median forecast. Auto manufacturing has been bolstering factory growth. Cars last quarter sold at the fastest pace in four years, according to industry data. Manufacturers pointed to gains in automotive and high- technology industries, the Federal Reserve said in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets today in Washington to set monetary policy. The firms “expressed optimism about near-term growth prospects, but they are somewhat concerned about rising petroleum prices, ” the Fed said in the report. Other Gauges Other manufacturing gauges continued to expand this month even as orders eased. Regional reports from the Federal Reserve Banks in the New York and Philadelphia showed factory growth slowed, while employment increased. 3M, maker of fuel system tune-up kits and Post-it Notes, yesterday jumped the most since January after posting a first- quarter profit that beat analysts’ estimates because of rising U. S. Auto and industrial demand. The St. Paul, Minnesota-based company’s industrial and transportation unit posted sales of $2.66 billion, an 8.6 percent increase. Those gains help explain why shares of machinery makers have outpaced the broader stock market this year. The Standard & Poor’s Machinery Supercomposite (S15MACH) Index (SPX), which includes companies like Cummins Inc. And Caterpillar Inc., has climbed 15 percent so far this year, compared with a 9.1 percent increase for the S&P 500 Index. Source: bloomberg.com