US Factories Hoard Steel and Aluminum, February Durable Goods Orders Increase by 0.9%

Core Capital Goods Orders, an Investment Indicator, Decrease by 0.3%

Increase for Two Consecutive Months Due to Stockpiling Before 25% Tariff Imposition

As the Trump administration decided to impose a 25% tariff on imported steel and aluminum, U.S. manufacturers rushed to secure supplies, leading to a 0.9% increase in U.S. durable goods orders in February.

On the 26th (local time), the U.S. Department of Commerce announced that all durable goods orders placed by U.S. factories in February increased by 0.9%. In particular, orders for primary metals and electronic products increased for two consecutive months. Orders excluding transportation equipment also increased by 0.7%. Shipments of core capital goods also increased by 0.9%.

Economists had expected February durable goods orders to decrease by 1.0%.

However, core capital goods orders, excluding defense and aircraft, which are interpreted as an investment indicator, actually decreased by 0.3%. This is the first decrease in four months since October last year.

This suggests that materials like steel and aluminum are being ordered in advance of tariff implementation, while investment-related decisions are being delayed due to uncertainties in tariff and tax policies.

Companies rushed to place orders before the tariffs took effect, and metal producers responded by raising prices. U.S. metal producers tend to raise prices when tariffs on competing foreign products increase.

MarketWatch pointed out that most U.S. companies are planning long-term investments but have doubts about President Trump's conflicting tariff and tax policies. Concerns about inflation and economic slowdown have led to a sharp decline in consumer confidence and a drop in the stock market, creating an uncertain business environment.

Shipments of core capital goods are data used by the U.S. government to calculate equipment investment when calculating Gross Domestic Product (GDP). Capital goods shipments rose by 0.9%, the largest increase in a year. Before the report was released, the Atlanta Federal Reserve's GDPNow forecast expected robust growth in first-quarter business equipment spending.

Guest reporter Kim Jung-a kja@hankyung.com