U.S. durable goods orders surged by 7.9% in April, far exceeding expectations, primarily driven by a sharp increase in new Boeing aircraft orders; however, core capital goods orders excluding aircraft unexpectedly dropped by 1.1%, indicating that while AI investment enthusiasm continues to provide support, supply chain pressures stemming from geopolitical tensions and tariffs have led businesses to adopt a more cautious stance on capital expenditures, resulting in structural divergence within the manufacturing sector.
April durable goods data in the United States showed a clear divergence: total orders significantly exceeded market expectations due to Boeing securing a large volume of new orders, yet core capital goods orders—a key barometer of business capital spending—unexpectedly contracted, complicating market assessments of actual manufacturing demand trends.
Data released by the U.S. Department of Commerce on Thursday showed:
Durable goods orders rose by 7.9%, versus an expected increase of 4.0% and a prior reading of 0.8%.
Durable goods orders excluding transportation equipment increased by 1.1%, compared with an expected gain of 0.5% and a prior reading of 0.9%.
Non-defense capital goods orders excluding aircraft declined by 1.1%, against an expected rise of 0.4% and a prior increase of 3.9%.
The contrasting performance of these two indicators highlights current structural divergence in manufacturing: Boeing’s surge in orders lifted headline figures, while weakening demand for categories such as computers and electronic products—combined with supply chain disruptions stemming from the conflict involving Iran, rising commodity prices, and persistent import tariff pressures—has weighed on certain manufacturing segments.
The current investment boom in artificial intelligence is a key force supporting the manufacturing sector. Sustained corporate investment in AI has driven demand for information processing equipment and related products, contributing to double-digit growth in business equipment spending in the first quarter.
Boeing’s order surge drove the overall jump
The strong April durable goods orders were primarily driven by sharp volatility in aerospace transportation equipment. Orders for transportation equipment as a whole surged 21.5% to $130.9 billion, with non-defense aircraft and parts orders alone soaring 165.9% for the month. According to Boeing’s (BA) official website, the company received 136 orders in April, many for high-value aircraft models, compared to just 33 orders in March.
Analysts noted that durable goods orders are often heavily influenced by large-ticket items like aircraft, where a small number of orders can represent substantial dollar values. Excluding transportation equipment, durable goods orders rose only 1.1% in April; excluding defense, they increased by 8.1%. Durable goods shipments rose 0.5% month-over-month to $324.3 billion, below March’s 0.8% gain; unfilled orders climbed 1.7% to $1.569 trillion.
Core capital goods orders unexpectedly softened, prompting businesses to adopt a more cautious spending stance.
The unexpected decline in core capital goods orders has drawn market attention. Orders for non-defense capital goods excluding aircraft fell by 1.1% in April, compared with economists’ prior expectation of a 0.4% increase. This reversal interrupted the strong upward momentum seen in the first few months of the year—February and March both recorded substantial gains, driving double-digit growth in business equipment spending for the first quarter.
By subcategory, orders for computers and electronic products declined by 0.7%, while orders for electrical equipment, appliances and components, machinery, primary metals, and fabricated metal products all posted increases. Core capital goods shipments rose by 0.4% in April, down from the 1.3% gain recorded in March.
AI investment underpins demand floor, while tariffs and supply chain disruptions persist.
Despite downward pressure on core orders, the wave of artificial intelligence (AI) investment continues to provide a critical buffer for manufacturing demand. Companies are steadily increasing AI-related expenditures, fueling demand for information processing equipment and related products, which helps offset the impact of supply chain bottlenecks and rising costs.
Supply chain disruptions triggered by the conflict involving Iran, along with sharp increases in commodity prices—particularly for oil and aluminum—are still weighing on certain manufacturing sectors; the effects of import tariffs have also yet to fully dissipate. A clearer assessment of underlying manufacturing trends requires examining the data after excluding the highly volatile aircraft category.
Editor/melody