US: Underlying trend looks solid for durable goods orders – BMO CM
|Michael Gregory, Deputy Chief Economist at BMO Capital Markets, explains that the post-election surge in US business confidence is persisting, which is starting to prod firms to execute on their investment intentions and expansion plans (in Q1, e.g., real private non-residential fixed investment grew more than 9% annualized).
Key Quotes
“Meanwhile, increasing oil exploration and production are pulling along the demand for related fabricated goods, as improving agricultural prices are starting to unwind the pent-up demand for new farm equipment. This highlights an underlying uptrend for durable goods orders. Rainy weather, elevated automotive inventories and a pullback in aircraft orders could be a problem for April’s print, but the underlying trend looks solid.”
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