What are Nondefense Capital Goods Orders ex Aircraft?

Source: Trading Economic | U.S. Census Bureau

Nondefense Capital Goods Orders ex Aircraft refers to a specific economic indicator that measures the monthly orders placed for non-military capital goods in the United States, excluding the volatile aircraft sector. This indicator is part of the Durable Goods Orders report published by the U.S. Census Bureau. It provides valuable insights into business investment trends and helps analysts and economists assess the health and direction of the non-military capital goods sector. 

How do Nondefense Capital Goods Orders ex Aircraft work?

Nondefense Capital Goods Orders ex Aircraft work by tracking and analyzing the monthly orders placed for capital goods in the United States, excluding the volatile aircraft sector. The U.S. Census Bureau collects data from various industries and manufacturers to compile this indicator. It provides insights into business investment activity and helps gauge the strength of the non-military capital goods sector. By excluding aircraft orders, which can fluctuate significantly due to large and infrequent purchases, the Nondefense Capital Goods Orders ex Aircraft provides a more accurate measure of underlying business investment trends. This data helps economists, policymakers, and market participants assess the level of confidence and willingness of businesses to invest in machinery, equipment, and technology, which are important drivers of economic growth. Changes in Nondefense Capital Goods Orders ex Aircraft can indicate shifts in business investment sentiment and impact various industries and sectors, making it a crucial indicator for investors to monitor.

Why is this important to investors?

1. Business investment trends: This indicator provides valuable insights into business investment trends, specifically in the non-military capital goods sector. Investors closely monitor these trends as they indicate the level of confidence and willingness of businesses to invest in machinery, equipment, and technology. Changes in capital goods orders can signal shifts in business sentiment, investment plans, and overall economic activity.
2. Economic growth: Business investment is a key driver of economic growth. Strong capital goods orders reflect a healthy investment environment and suggest potential expansion in various industries. Investors use this indicator to assess the overall health of the economy and make informed decisions about their investment strategies.
3. Sector-specific impact: The Nondefense Capital Goods Orders ex Aircraft provides insights into specific sectors, such as machinery, equipment, and technology. Investors can analyze this data to identify sectors that are experiencing increased investment and growth opportunities. By understanding the trends in capital goods orders, investors can make informed decisions about sector-specific investments.