Macro Flash Report

Auto Industry & Durable Goods Orders


February’s surge in Auto Sales (SAAR) serves as a promising precursor for an improvement in upcoming Durable Goods Orders after a disappointing start to the year.

January’s slump can be most significantly attributed to the downturn in transportation, which can be seen further by the less severe decline in Durables Excluding Transportation. Thus, the uptick in auto sales, following January’s dip, signals a potential rebound in the transportation segment of Durable Goods Orders. Overall, this revival in auto sales not only reflects an improved market sentiment but also hints at a broader recovery in Durable Goods Orders for February.

Wards Total Vehicles Sales for February jumped up to 15.81m from January’s revised lower 14.92m sales – the lowest since April 2023. This leap exceeded market expectations, which anticipated a rise to 15.40m.

  • This recovery mirrors December’s revised higher figure of 16.12 million, the peak since June 2021, highlighting a swift bounce back from January’s substantial slump.

The final data for January revealed a significant downturn in Durable Goods Orders, plummeting to -6.2% from -0.3% in December, and undershooting both the initial forecast -4.5% and the revised market expectation and preliminary data figure of -6.1%.

  • This downturn marked the sharpest monthly fall April 2020.
  • This slump was primarily due to a significant drop in transportation equipment orders (-16.2% vs -0.6% in December), driven partly by reduced demand in motor vehicles and parts (-0.4% vs 0.2%).

Meanwhile, Durables Excluding Transportation fell to -0.4% from December’s -0.2%, below the initial market anticipated rise to 0.2% and the revised expectation and preliminary data rate of -0.3%.

  • Despite this decline, the non-transportation segment showed relative resilience compared to the broader downturn.

**transportation new orders represent approximately 33% of durable goods new orders.