By Mary Hanbury


Next Tuesday morning The United States Census Bureau releases its monthly durable goods report for March. Economists polled by Bloomberg expect a 1.9 percent increase in the headline figure, driven by a spike in Boeing aircraft orders. Here are five things to watch in the report.


  1. March numbers may prove January report was a fluke


After an ugly four month stretch at the end of 2015, orders for long-lasting factory goods rebounded in January but dropped again in February. Economists are now looking to March numbers to see whether January was a statistical blip or whether the industry is finally showing signs of stabilization after being hit by the strong dollar, plunging crude oil prices and a weak global economy.


“We are assuming these numbers are going to improve,” said Mike Englund chief economist at Action Economics, who is anticipating a minor increase in new orders in March followed by bigger gains in April and May.


Although industrial production has been trending downwards since December 2014, there are signs of progress in regional manufacturing reports, leading economists to believe that the industry is not heading into recession.


This month, all eyes will be on core capital goods – a proxy for business investment – where the increase is expected to be around 0.5 percent.



  1. Are we coming to the end of the oil crisis?


Most of the weakness in U.S. manufacturing is tried to a contraction in the energy sector. Oil prices are now beginning to level out and though the process between drilling and output is lengthy, gradual change is expected.


“It’s not going to fall for ever and we know it can’t go be below zero,” said Scott Brown Chief Economist at Raymond James.


  1. Are there any bright signs?


Consumer spending for durables such as autos and computers was solid throughout January and February. Car manufacturers benefited from an aging fleet in the U.S. and consumers looking to upgrade to newer models. However, this boom is coming to an end and we are likely to see this reflected in the March numbers for autos.



  1. Good news for workers?

Unfilled orders in this month’s report will be a key factor in determining future job growth. As demand picks up factories are forced to ramp up production which will mean more opportunity for the labor market and positive impacts for wages in general.


  1. What does this mean for the broader economy?


The estimate for Q1 GDP is soft, at 0.5% growth. Though durables are only a small component of this, an increase in the amount of shipments – a reflection of what is going on in the economy right now – would be a positive boost.


We are finally coming to the end of the inventory cycle, a process which began in June 2015 and is expected to reach bottom in March. Inventory to sales ratios are likely to start trending downwards by the second quarter.