According to the United States’ (US) Commerce Department, new orders for durable goods rose by 2.4% in December 2019 relative to the downward revision of 3.1% for No-vember. This uptick in new orders for durable goods was due to an increase in defense orders as Congress approved funding bills that included a boost in military spending. Meanwhile, new orders for non-defense capital goods excluding aircraft fell to $68.6B, 0.9% below the previous month. New durable goods orders overall declined by 1.5% for 2019 compared to 2018, with core orders up 0.8% in the year.
We believe that with the easing of trade tensions between the US and China, business investment may increase in the near to short-term. However, this increase may be limited by current downside risks surrounding the trading relationship between the US and its other trading partners and the outbreak of the coronavirus that could lead to a further slowing of the global economy.