Durables can reveal signs of local recovery

OK, so no one’s ever dreamed about striding to a podium, awash in applause, to accept an award for a well-reported can’t-put-it-down durable goods order story. (Right?)

Still, for those of us fortunate enough to still have any manufacturers to cover, the U.S. Census Bureau’s monthly update – July numbers are due out Wednesday at 8:30 a.m. - is a good source of comparative data for layering into stories about local industry.

And even if your nearby factories have been idled or shuttered, your territory probably includes dealers or operators of farm equipment, appliances, furniture, MRI machines, computers, toys and TVs, to name a few.

Factories and their workers all are affected by demand for durables – defined as equipment intended to last for more than a couple of years. (By comparison, non-durables would encompass consumable items from toothpaste to blue jeans to plastic bags and gasoline.)

Each month the Census Bureau releases its M3 report, formally known as Manufacturers’ Shipments, Inventories and Orders.

The M3 is considered a harbinger of industrial activity, can move the market and a sustained uptick would be seen as a light at the end of our recessionary tunnel. Analysts were pleasantly surprised by June’s numbers, which showed an unexpected 1.1 percent increase in orders, excluding aircraft and automobiles.

Since cars and planes are the biggies and tend to last the longest – there are probably DC-9s soaring around out there older than you! – orders for those items can skew a report and hence are generally stripped out of the numbers analysts use to get a true picture of manufacturing momentum.

Read down into the durable goods press release for information about specific products and sectors which may springboard ideas for coverage in your area. Home builders, defense contractors, retailers – they’ll all be eyeing the report and can give you their take on what it bodes for local business recovery.

Academic economists also will have their take on the report.

Transport firms – trucks, railroads and air freight coordinators – must be in your vicinity and can you give you the haulers-eye view of what’s moving. And of course, somebody’s got to finance all that hardware – talk to lenders and retailers about the business and consumer credit situation going into the fourth quarter.

Durable goods may not sound too sexy but they pay a lot of bills and sustain a lot of jobs. Illustrating the connection from the M3 to your readers is a challenge but one worth taking on.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.