Orders for business equipment unexpectedly fell in March for a seventh consecutive month, a sign business investment will remain sluggish.
Bookings for non-military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, dropped 0.5 percent, data from the Commerce Department showed Friday in Washington. Demand for all durable goods — items meant to last at least three years — rose 4 percent on aircraft and autos.
Oil and mining companies such as Halliburton Co. are trimming investment and other manufacturers are struggling from the combined onslaught of a stronger dollar and weak global markets that is depressing exports. At the same time, hiring gains will help sustain demand for long-lasting goods such as vehicles and keep factories running.
“It’s reflective of the impact of a stronger dollar that tends to hit larger firms and exporters,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida, who is the second-best forecaster of the capital spending data over the past two years, according to data compiled by Bloomberg. “Put together with the drop we’re seeing in the energy sector, it all adds up to a weak quarter.”
Stock-index future held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in June climbed 0.2 percent to 2,110.6 at 8:52 a.m. in New York.