Orders For Big-Ticket Computer Wares Slip

As spring segues into summer and temperatures begin to rise, one slice of the IT manufacturing sector is cooling off. Computer and related products designed to last three or more years weakened in May, the government reported Friday.

Though IT-tied durable-goods orders trailed the overall market in May, the sector continues to outperform the manufacturing economy over the past 12 months. Indeed, experts caution not to read too much into a single month's report, saying periodic hiccups should be expected.

The value of new orders for durable computers and related products in May fell a seasonally adjusted 7%, and shipments declined 2.4%, the Commerce Department reports. By comparison, overall durable goods orders rose 5.5% in May, bolstered by strong demand for aircraft, while shipments dipped 0.2%. All numbers for May are preliminary.

For the past 12 months, IT wares experienced a rise of 21.5% for new orders and 23% for shipments, versus 5.5% and 6.2%, respectively, for all durable goods.

Commerce pegged the value of durable computer products ordered in May at nearly $10.2 billion. That's about 5% of the value of all durable goods orders last month.

The Commerce report suggests that manufacturers are easily moving IT wares through their supply chains. The backlog in orders fell 4.8% last month, as inventories inched ahead a mere 0.1%. For all durable goods, unfilled orders rose 1.9% and inventors gained 0.3% in May. Since May 2004, the backlog for IT wares fell 2.4%, but gained 7.4% for all types of durable goods. Inventories this past year for computer products increased 12%, compared with 8.6% for all categories.