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Business Title: U.S. Durable-Goods Orders Excluding Transportation Jump by Most Since 2007 April 23 (Bloomberg) -- Orders for durable goods excluding transportation surged in March by the most since the recession began in December 2007, adding to evidence the U.S. recovery is broadening and strengthening. The 2.8 percent increase in bookings for goods meant to last at least three years, excluding cars and aircraft, was four times larger than the median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Total orders unexpectedly dropped 1.3 percent, depressed by a 67 percent plunge in demand for commercial aircraft that is often volatile. Eaton Corp. is among companies that may see sales grow as the global economic rebound propels exports, and rising profits spur investments in new equipment. A broadening of the expansion beyond factories is dependent on employment gains following the worst recession in seven decades. “The capital spending rebound we saw take place in the second half of last year continues to look pretty healthy into the first half of this year,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, who forecast a 2.3 percent gain in non-transportation orders. “The manufacturing sector continues to perform well.” Stock-index futures added to earlier gains following the report. The contract on the Standard & Poor’s 500 Index rose 0.2 percent to 1,204.6 at 8:44 a.m. in New York. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 3.82 percent from 3.77 percent late yesterday. Median Forecast Economists projected a 0.2 percent gain in orders, according to the median of 75 estimates in a Bloomberg News survey. Forecasts ranged from a decline of 1.6 percent to a 2.5 percent increase. The government revised the February gain in total bookings up to 1.1 percent from a previously reported 0.9 percent gain. Excluding transportation equipment, orders were forecast to rise 0.7 percent, according to the survey median. Last month’s gain in orders was broad-based as demand for computers, machinery, metals, electrical equipment and automobiles climbed. The 3.4 percent gain in orders for computers and electrical equipment was the biggest in a year. Boeing, the world’s second-biggest commercial-plane maker, said it received 43 orders in March, down from 47 orders a month earlier. Boeing’s marketing chief Randy Tinseth said in a Bloomberg TV interview this week that orders this year were expected to match last year’s 15-year low of 142. More Investment Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, increased 4 percent. Shipments of those items, used in calculating gross domestic product, increased 2.2 percent. Orders excluding defense equipment decreased 1.2 percent and bookings for military gear fell 4 percent. Factories are ramping up output as improving economies from Brazil to China and India boost overseas sales and rising U.S. demand prompts companies to update equipment and replenish stockpiles after last year’s record drawdown. Factories boosted durable-goods inventories by 0.2 percent, a third straight gain. Exports rose in February to the highest level since October 2008, the Commerce Department reported last week. Manufacturing last month expanded at the fastest pace since 2004, according to a national survey of purchasing managers. Raising Forecasts Eaton, the Cleveland-based maker of engine valves and transmissions, is among companies profiting from growth in demand for car and truck parts. This week it posted first- quarter profit that exceeded analysts’ estimates and raised its 2010 earnings forecast. “The expanding world economy drove growth in most of our markets,” Chief Executive Officer Sandy Cutler said in a statement. “In general we are seeing the strongest growth in Asia and Brazil, while many U.S. markets are starting to accelerate and Europe is recovering more modestly.” Business investment in equipment and software climbed at a 19 percent annual rate in the fourth quarter, the biggest gain in 11 years.
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