What Happens to Industrials (XLI) When Durable Goods Orders Plummet?
What happens when durable goods orders plummet? Capex signal, manufacturing weakness, and investment cycle implications.
How Industrials (XLI) Responds
Scenario Background
Durable goods orders measure new orders placed with US manufacturers for long-lived items (machinery, transportation equipment, computers, appliances). Core capital goods orders (ex-defense, ex-aircraft) are the cleanest capex signal, while headline orders include volatile aircraft categories that can swing prints significantly.
Read full scenario analysis →Historical Context
Durable goods orders have seen sharp declines during every recession: 2008-2009 (peak -40% YoY), 2020 (-60% in April), and 2001 (peak -25%). Post-COVID orders have been elevated due to pent-up demand, supply chain catch-up, and AI-related capex (semiconductors, data center equipment). Core capital goods orders have been particularly resilient in 2023-2024.
What to Watch For
- •Core capital goods orders YoY turning negative
- •ISM Manufacturing new orders below 45
- •Business investment in GDP data turning negative
- •Capacity utilization declining below 76%
- •CEO confidence surveys declining sharply
Other Assets When Durable Goods Orders Plummet
Other Scenarios Affecting Industrials (XLI)
Get scenario analysis and Industrials (XLI) alerts delivered to your inbox.