
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 24, 1993                   TAG: 9304240129
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

DURABLES' PLUNGE LOOKS LIKE BAD NEWS

Orders to American factories for big-ticket durable goods such as cars and computers recorded the worst drop in 15 months during March.

"The economy's doing the hesitation waltz again," one analyst declared.

Orders fell 3.7 percent to a seasonally adjusted $130 billion, the sharpest decrease since December 1991, the Commerce Department reported Friday. Economists had expected a far milder drop of 1 percent or less.

Robert G. Dederick, an economist with Northern Trust Co. in Chicago who made the "hesitation waltz" comment, said the latest report fits with other evidence showing the economy losing momentum early this year compared with the end of last year.

"This is still an expansion that doesn't have all the cylinders firing. We still don't have the process going where strength begets strength begets more strength," he said.

Dederick said he was particularly concerned about a 1.1 percent pullback in total unfilled orders, which reflects future demand. "The advance was broken, and broken rather decisively," he said.

Durable goods - items from toaster ovens to turbines expected to last three or more years - are considered a crucial barometer of the economy's strength. Before businesses and consumers will buy them, they need enough faith in the economy's health to be willing to borrow.

Even with the latest setback, March orders were 6.3 percent higher than a year ago.

In another worrisome sign, factories reported their backlog of unfilled orders fell 1.1 percent to a seasonally adjusted $447.4 billion, the first decline since November.

Every category of orders was down except defense orders, which rose 6.5 percent to a seasonally adjusted $6.8 billion. Excluding the defense sector, orders fell 4.2 percent, also the worst in 15 months.

Transportation orders, pulled down by a decline in aircraft orders, plummeted 10.2 percent, the worst in four months, to a seasonally adjusted $32.7 billion.

Orders for primary metals such as steel fell 0.3 percent; and industrial machinery and equipment, 0.4 percent. Non-defense capital goods orders, a gauge of businesses' investment activity, tumbled 12.4 percent.

by CNB