Wall Street Journal Op Ed

According to Wall Street dated 26 March 2014 by Martin Crutstinger, the rise in commercial aircraft demand in pushed up the orders of durable goods and long lasting manufactured goods up in the month of February after months of decline. This increase in the demand offset a steep drop of the capital goods orders that had affected most of the business plans in United States. Most of the economist in the country noted that the gain was expected to ensure favorable investment environment and growth in the first quarter of the financial year of most investments.

Most of them suggested that, majority of the business spending in the year were fairly healthy considering the increase in commercial aircraft demand. This was indicated by 5.7% increase of the overall order of durable goods in the months of January to February. This followed the rebound in the volatile commercial aircraft demands that has heavily affected the flow of most businesses. The increased demand of long lasting manufactured goods was the highest to be experienced in the last five month according to United States of America commerce department.

It was not business as usual because the demand of the long lasting manufactured products rose to 95.3% after 24% drop of the demand in the month of January. The demand of the motor vehicles and their spare parts increased to 3.8% the best number to be attained since 2012. This amount excluded the volatile transportation sector which caused the orders to be down by 0.5%. Although durable goods are expected to last for at least three years, their demand can fluctuate sharply from one month to the other. In order for the economist to come up with a clear analysis, they paid a close attention to the core capital goods which are mainly affected by the commercial aircraft transport. The analysis provided a better indication of the trend of business investment and how it is affected by changes of the commercial aircraft demand.

The order for these good declined in the month of January and February by a small margin of 2.7%. The demand for computer increased while those of communication equipment and machinery weakened. This followed a 6.7% gain experienced in the month of January the biggest one month gain experienced after three years of volatile business investment trend. Apart from February where the demand for the long lasting manufactured goods decline, their demand drastically increased in the previous four month.

According to Greenhaus, because the demand for the capital goods were average in the first months of the year, then the demand of the core order rose at about 5% compared to the last three month of the previous year. In addition, according to peter Newland an economist at Barclays the strength or orders of the durable goods experienced in the first quarter of the financial year prompted