Durables Headline Sinks 4.5%, Core Capex Climbs 1.6%: The Aircraft Mirage in May’s Orders

The official release dated 2026-06-25 screams a -4.5% m/m drop in total durable goods new orders for May. Look closer, and the headline fades: excluding transportation, orders rose 1.3%, and the bellwether for private investment—nondefense capital goods excluding aircraft—advanced 1.6% with shipments up 0.3%. The culprit is unmistakable: a -51.8% plunge in nondefense aircraft and parts orders (from $37,000m in April to $17,830m in May). Autos, for the record, rose 1.1%.

Here’s what the data actually reveals:

• Transportation collapsed -14.0% m/m, but it’s almost entirely aircraft; motor vehicles and parts rose 1.1%.

• Core private capex held firm: nondefense capital goods ex-aircraft +1.6% m/m in orders; shipments +0.3% m/m.

• Defense is no ballast: defense aircraft +7.9% m/m, yet total defense capital goods -3.4% m/m.

• Execution outpaced intake: total shipments +1.0% m/m while new orders -4.5% m/m; manufacturers with backlogs shipped +1.2% even as new orders fell -6.4%.

• Year to date, nondefense aircraft orders are -22.4% vs 2025, dragging total nondefense capital goods -0.4% YTD despite an +8.3% YTD gain in core ex-aircraft.

Revisions matter: April is marked revised, and this is an advance report. Given aircraft whiplash—April’s surge, May’s collapse—subsequent revisions could materially shift headlines. The core ex-aircraft series is the steadier compass. One more caveat: new orders exclude semiconductors (while shipments include them within computers/electronics), so don’t overread chip-related shipment strength into forward orders.

Aircraft’s Vanishing Act: The 51.8% Swing That Rewrote the Headline

The entire story arc hinges on nondefense aircraft’s -51.8% m/m reversal to $17,830m from $37,000m in April. That April pop was itself +167.4% m/m—a reminder that aircraft bookings arrive in lumpy tranches, not smooth flows. Transportation’s -14.0% drop is therefore not “sectoral weakness” but a single subcategory spiking and sagging on schedule slippage and batch orders.

• Within transportation, the supposed weakness doesn’t generalize: motor vehicles and parts were +1.1% m/m, hardly a soft patch.

• Year to date (NSA), nondefense aircraft is -22.4% vs 2025—structural softness that’s been quietly pulling total nondefense capital goods to -0.4% YTD, even as the ex-aircraft core climbs 8.3% YTD.

If you judge manufacturing by aircraft headlines, you’ll keep relearning the same lesson: volatility isn’t trend.

Core Capex Quietly Accelerates

Strip out the jets, and the private capex signal improved:

• Nondefense capital goods excluding aircraft: orders +1.6% m/m, shipments +0.3% m/m.

• Ex-transportation orders overall: +1.3% m/m, marking a third straight steady gain after +1.1% (Mar) and +1.4% (Apr).

This is the series corporate treasurers care about. It maps to equipment investment and, by extension, to productivity’s slow grind upward. While not a boom, a +1.6% m/m print in core orders—paired with rising shipments—signals ongoing equipment demand in areas like factory automation, software-heavy machinery, and electrical equipment.

Orders Say “Slow,” Shipments Say “Go”

May’s execution beat intake:

• Total shipments rose +1.0% m/m to $327,888m, while total new orders fell -4.5% to $332,050m.

• For manufacturers with unfilled orders, shipments +1.2% m/m vs new orders -6.4% m/m shows backlog drawdown doing the heavy lifting.

That wedge matters for GDP math. Shipments feed production and near-term output; orders steer the forward pipeline. A widening gap means near-term production can hold up even as forward momentum softens. It also increases sensitivity to any negative shock if backlogs deplete faster than new demand materializes.

Defense: Mixed Signals, Murky Momentum

Defense aircraft orders +7.9% m/m couldn’t offset a -3.4% m/m slide in total defense capital goods. That divergence suggests uneven contract timing and no broad-based defense uplift in May. With appropriations settled and certain programs ramping, the defense impulse should be supportive through year-end—but May’s data show it won’t be a smooth tailwind month-to-month.

Data Check: Volatility, Context, and Drift

Durables data always test patience. The latest report extends a familiar pattern: shipments drift, orders lurch.

• From March to April, total new orders surged +8.5% (from $320,485m to $347,618m), then fell -4.5% in May (to $332,050m)—an aircraft-dominated whipsaw.

• Ex-transportation orders have been steadier: +1.1% (Mar), +1.4% (Apr), +1.3% (May).

• Nondefense capital goods total: +24.9% (Apr) then -15.7% (May) due to aircraft; ex-aircraft: -0.7% (Apr) and +1.6% (May)—a far calmer trajectory.

Historical releases warned us about this “headline drift”:

• 2025-09-25: Shipments $307,510m, -0.2% m/m after +1.6% and +0.7% prior months.

• 2025-12-23: Shipments $309,634m, +0.6% m/m.

• 2026-06-25: Shipments +1.0% m/m to $327,888m while new orders -4.5%.

The lesson: anchoring on total orders tells you more about aircraft booking cadence than the health of core manufacturing.

Quick Read: May by the Numbers

Note: April figures are revised; this is an advance report and subject to further revision. New orders exclude semiconductors; shipments include them within computers/electronics.

What This Means for Markets

• Equities—Industrial core over aerospace order books: The +1.6% rise in core capex orders supports quality industrials tied to equipment and factory automation. Be cautious with commercial aerospace names overly sensitive to booking cycles; YTD nondefense aircraft orders at -22.4% argue for patience on pure order backlogs.

• Cyclicals vs defensives: The shipments/orders wedge (“shipments up, orders down”) supports near-term revenue recognition for backlogged manufacturers, but narrows the margin for disappointment in 2H if intake doesn’t reaccelerate. Favor firms with diversified order funnels and shorter lead times.

• Rates and the macro read: A stable ex-transport trend and modest +0.3% gain in core shipments point to a constructive, not overheating, equipment investment path. That leans neutral for the Fed—no fresh inflation impulse from goods capex, but also no hard-landing signal.

• GDP trackers: Core nondefense capex shipments feed into equipment investment; May’s +0.3% prints as a modest positive for Q2 real GDP contributions. Watch revisions—aircraft could still swing top-line aggregates, but core is less revision-prone.

• Supply chain and pricing: Backlog drawdown (shipments > orders) can relieve some pricing power for suppliers as urgency fades. Expect more normalizing lead times and disciplined inventory management into Q3.

The Investor Takeaway

• Lean into the signal: The core ex-aircraft series is the investable trend—orders +1.6%, shipments +0.3%, YTD +8.3%. That favors exposure to factory automation, electrical equipment, and productivity-enhancing tools over order-cycle aerospace bets.

• Respect the backlog math: With shipments outpacing orders, near-term results can hold, but 2H visibility depends on rekindling intake. Prefer companies with faster book-to-ship cycles and broad end-market exposure.

• Mind defense dispersion: A +7.9% pop in defense aircraft amid a -3.4% drop in total defense capital goods says “uneven.” Stock-pick across programs, not the theme.

• Prepare for revisions and nuance: April is revised; this is an advance print. Don’t overreact to aircraft-driven totals; build forecasts on ex-transport and core ex-aircraft.

The headline was loud, the core was steady, and the backlogs did the heavy lifting. If you’re trading the -4.5% as manufacturing malaise, you’re trading the aircraft tape, not the economy. Follow the core capex line—that’s where the real cycle is still moving.