Orders for big-ticket manufactured goods plunged 14.4% in March, the second-biggest decline on record. The worse-than-expected slide underscored the severity of the economic impact from the pandemic.
New orders for commercial airlines actually went negative as cancellations outpaced sales. Those orders plunged 295.7% with skies largely empty of planes. The last time so few people traveled by plane was in the pre-jet era.
The March decline was surpassed only by an 18.4% drop in August 2014. There was a 1.1% gain in February, before the government-mandated shutdowns to contain the virus had begun. Demand in a key category that serves as a proxy for business investment eked out a 0.1% gain, but that followed a 0.8% decline in February.
The report Friday from the Commerce Department showed widespread weakness, with demand for transportation products falling 41%. Demand for motor vehicles and commercial airliners both tumbled.
The dire numbers from Commerce followed a report showing that manufacturing production collapsed in March, with declines that have not been seen since the country demobilized after World War II.
And worse is on the way.
The numbers from March capture only the beginning of the lockdown in mid-March. When April manufacturing numbers are released next month, the full force of the pandemic will be on display.
“We expect the coronavirus will deal a severe blow to U.S. business spending via suppressed global and domestic demand, broken supply chains, depressed oil prices, tighter financial conditions and elevated uncertainty,” said Gregory Daco, chief economist at Oxford Economics.
“This will translate into some of the largest pullbacks in capital spending of all time,” Daco said.
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