Manufacturers’ new orders for non-defence capital goods excluding aircraft are a leading economic indicator that measures the volume of new purchase orders received by manufacturers for capital goods.

Capital goods are used in the production of other goods or services and exclude defence and aircraft orders to provide a clearer view of business investment and economic trends.

New orders for capital goods are significant because they represent business investment in equipment and infrastructure, excluding the highly volatile sectors of defence and aerospace.

They are a proxy for future manufacturing activity, as increased orders often lead to higher production levels, more labor demand, and increased business spending.

They also reflect the long-term confidence businesses have in the economic outlook, which is essential for sustainable economic growth.

Recession Signal

There is no magic number or level to signal a recession, using this indicator. But Trend is important.

A decline can indicate that businesses are scaling back investment due to a negative outlook on future demand, potentially flagging an upcoming recession.

This indicator can reduce noise as it strips out defence and aircraft orders, which can be influenced by government spending and political decisions rather than market conditions.

Track This Yourself

You can find this data on TradingView: https://www.tradingview.com/chart/v7ZG3yMA/?symbol=FRED%3ANEWORDER