According to a recent roundup of economic indicators, there appears to be some steam left in the economy. Shipments of manufactured durable goods in June increased 0.7% to $195.7 billion, the U.S. Department of Commerce said Wednesday.

The Department of Commerce said in June that new orders for manufactured durable goods increased 0.7% to $191.7 billion, after following a revised 0.9% May decrease. This marks the first increase since the 5.9% surge posted for March 2004— an indication that the rate has some sustainability.

New orders were driven by a 4.2% surge in transportation equipment, especially in defense aircraft and parts. Excluding transportation, new orders decreased 0.6%.

Indicators in the manufacturing sector looked positive as machinery shipments posted the largest increase, up 3.1% to $24 billion. In a separate report, Nassau, an asset management company, reported that machine tools did not make the top five repossessed equipment categories for the second quarter, stating this is “another indicator that this sector is brightening.”

“The data implies that manufacturing has been trending upward,” said Chris Brady, president of Commercial Motor Vehicle Consulting. “That’s what lowers repossession rates— they [manufacturers] can pay for their equipment.”

Unfilled orders for manufactured durable goods in June increased 0.6% to $527.5 billion, following a 0.6% May increase. Unfilled orders increase when new orders outstrip manufacturing output— a positive indicator for manufacturing.

“As unfilled orders expand producers are more confident in hiring,” Brady said. “The good thing right now is the backlog has been growing as output has increased.”

This is reflected in today’s Freightliner announcement that its Portland, OR plant will begin a second shift, adding approximately 700 full-time employees. This follows another Freightliner announcement of plans to hire 600 plant workers and add a third shift early June.

Volvo Group added another shift to its New River Valley plant in VA, in May. “Order bookings for the Group's trucks continue to develop favorably and remain at a high level. We are now proceeding with increasing the pace in our industrial systems," said Volvo CEO Leif Johansson.

Additionally, the increase in backlogs and output in the manufacturing sector has been a major drive in Class 8 truck sales, Brady said. “The manufacturing sector has been expanding in the second half of the year. That’s requiring carriers to expand capacity to meet their customer’s needs,” Brady said. “You can expect a sustainable need for drivers and high freight rates.”

“As we go forward, production of manufacturing is going to expand and that implies future growth for trucking,” Brady said.

Freight Tonnage Up

Freight tonnage went up a seasonally adjusted 0.5% in June, the American Trucking Associations (ATA) said Wednesday. The unadjusted index went up 7%, but June is typically a strong month— which moderates the seasonal figure.

Compared with June 2003, the unadjusted index rose 11.1%, marking the second-largest year-over-year increase in a year and a half.

“June’s data shows that the trucking industry continues to deliver a robustly growing economy,” said ATA chief economist Bob Costello.

Consumer Confidence Positive

The consumer confidence index increased to 106.1 in July, up from 102.8 in June, said the Conference Board on Tuesday. This follows a sharp June increase.

Consumers’ outlook on the economy is mixed but favorable overall, the Conference Board said.

“Consumer confidence has now increased for four consecutive months, and is at its highest since June 2002 when it registered 106.3,” said Lynn Franco, director of the Conference Board’s consumer research center. “The spring turnaround is fueled by gains in employment, and unless the job market sours, consumer confidence should continue to post solid numbers.”

Home Sales Dip

New home sales dropped 0.8% to a seasonally adjusted annual rate of 1,326,000 in June from the month earlier, the U.S. Census Bureau said Tuesday. This drop came off a staggering 11.7% sales spike in May and just before the Federal Reserve Board announced its anticipated quarter-point interest rate hike in July 1.

The average sales price of a new home was $262,400.

The South, which accounts for the lion’s share of home sales, saw a 9.6% boost to 696 homes sold. All other regions posted a decrease— with the Northeast down 14.2% to 91 units and the West down 13.1% to 338 units.