US Apr manufacturing remains choppy on weak business spending plans

The United States manufacturing sector remains choppy following weak business spending plans in April, though durable goods orders picked up on strong demand for transportation equipments and a range of other products.

However, non-defense capital goods, a strong proxy for business spending plans, witnessed a decline in April. Further, the core-capital goods orders have also declined for three straight months.

Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, jumped 3.4 pct last month after an upwardly revised 1.9 pct increase in March, the Commerce Department said on Thursday.

Also, non-defense capital goods fell 0.8 pct after an upwardly revised 0.1 pct drop the prior month. Report from the Census Bureau confirmed that the manufacturing sector in the world’s largest economy remained soft throughout the first quarter and will require time to rebound.

"We do not expect to see a near-term turn around in the US manufacturing sector," Barclays commented in a recent research note.

A Reuters poll of economists had predicted durable goods orders to rise 0.5 pct last month and core capital goods orders rising by 0.4 pct.

Orders for civilian aircraft soared 64.9 pct. Orders for motor vehicles and parts increased 2.9 pct. There were increases in orders for fabricated metal products, computers and electronic goods, and electrical equipment, appliances and components, as well. Orders for machinery fell 1.9 pct and demand for primary metals remained unchanged. Shipments of core capital goods rose 0.3 pct, reversing March's 0.3 pct drop.

Meanwhile, Schlumberger and Halliburton, major oilfield service firms have cut their expenditure on capital projects, due to declining profits on subdued global oil prices. This has also weighed to drag the manufacturing sector.