Minerals And The Economy - First-Quarter Slowdown May Continue Well Into 1989 - First Quarter 1989

Seasonally adjusted new factory orders for primary metals declined in January, February, and March, especially in the steel industry. The decline was part of an apparent slowdown for the entire manufacturing sector. Orders for all durable goods, including not only primary metals, but also clay, glass, and stone products, fabricated metal products, machinery, and transportation equipment, fell in January and February. In March, orders rose a slight 0.8%. According to the U.S. Department of Commerce, the downturns in durable goods orders in January and February were the first back-to-back declines in 3 years. They were largely attributed to a drop in orders for transportation equipment, mainly auto-mobiles and aircraft, while the small gain in March was due to a surge in aircraft orders. Higher interest rates may be partly responsible for the slowdown in durable goods orders over the past 3 months. The higher rates have also hit the construction industry--another major end-user of minerals. Construction of new homes and apartments fell by a seasonally adjusted annual rate of 5.4% in March, following a 12% decline in February.