While the energy companies like Chesapeake Energy Corporation (NYSE:CHK) and Schlumberger Limited. (NYSE:SLB) are announcing huge cut in capital spending, the reports about a snail-paced patch of the manufacturing sector in the U.S. are making way. Various reports are making way, signalling towards a fact that the orders for core products dropped down in February 2015. This indicated once again that the manufacturing sector of the U.S. is riding the slower path.
The steep cut in durable goods
The order for durable goods dropped 1.4%, according to the Department of Commerce. This clearly defies the forecast of an increase of 0.7%. The gain in January 2015 was revised once again, keeping it stuck to 2%, instead of previously promised 2.8%. Excluding transportation sector, the durables dropped down 0.4% and this is the fifth consecutive monthly downfall.
Headwinds shaking the manufacturing sector
This sector has been facing the headwinds from past few months. However, some of the issues like the labor dispute in ports of West Coast, as well as the winter season, will be passing soon. But there are other vital issues like the effect of constantly shaking oil prices on the companies belonging to energy sector, and the rising dollar, which will act as damaging factors.
The downrightly ugly report
According to Millan Mulraine of the Research and Strategy Wing of the country, the report details prove to be “downrightly ugly.” He also added that the overall investment could in fact; bring down the complete GDP of the first quarter.
The orders of core capital goods have also dropped 1.4% in February 2015, and there has been no sign of significant improvement since August 2014. Millan Mulraine added that the report depicted a weak tone and this was going to add to the range of economic factors that are softening the growth momentum in the U.S.