Daily Insight
Group Economics Macro & Financial Markets Research
29 January 2016
US capital spending hit by oil price slump
Bigger than expected decline in US durable goods orders…
Senior Economist
…confirms weakness of industrial activity…
Tel: +31 20 343 5618
…and suggests investment in energy sector still a drag for US economy
Maritza.cabezas@nl.abnamro.com
German inflation edges up, but should come down again soon
Maritza Cabezas
Aline Schuiling Senior Economist
Decline in US core durable goods orders confirms weakness of industrial activity
Tel: +31 20 343 5606
US durable goods orders plunged in December, likely as a result of falling oil prices,
aline.schuiling @nl.abnamro.com
the strong dollar and lacklustre global demand, which are putting downward pressure on the industrial sector. US durable goods orders fell 5.1% mom in December from -0.5% the previous month, far below the consensus forecast (-0.7%). This was partly the result of a fall in non-defense aircraft orders, which fell by 29.4% mom. However, core capital goods orders ex-aircraft were also weak (-4.3% down from -1.1% the previous month). Outside transportation, the slowdown came from orders of machinery, which fell by 5.6% mom, while computers fell 2%. The only increase was in metals and electrical equipment. The three month annualised growth rate of core capital goods orders was weak (-6.9%, up from 0.6% the previous month). Although these reports are volatile, the weakness of the manufacturing sector has been there for a while and we don’t expect a rebound in the near term. Weak capital goods orders and shipments
Energy investment takes a hit from low oil prices
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16 Investment in mining contribution to GDP (lhs)
Capital goods orders Source: Thomson Reuters Datstream
Capital goods shipments
Oil prices (rhs) Source: Thomson Reuters Datastream
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