February’s unexpectedly strong durable goods report masked weak business investment in manufacturing, a sign that an industry bracing for COVID-19 fallout already stands on unstable ground.

The report released Wednesday by the Commerce Department showed a 1.2% uptick in all durable goods orders. The volatile transportation category led the charge with a 4.6% rise. An inexplicably large order for new ships steered the trend.

Core capital goods, items like machinery and computers that serve as a metric for business investment, fell 0.8%. The dip in new orders reveals an industry that lacks the confidence to bankroll future investment.

Decreased orders for core capital goods aren’t due to COVID-19’s impact, but rather show a continued trend of reluctant business investment. Still, it’s evident that February’s figures highlight a few key industries positioned to either benefit or suffer from the economic dislocation caused by the pandemic.

Expenditures on big-ticket items concealed a slump in core capital goods orders.

“Once you strip out the transportation orders it’s actually a weak report,” said Stephen Gallagher, Chief U.S. Economist for Societe Generale.

Last month’s orders of nondefense capital goods, excluding aircraft follow a holding pattern: several quarters of ebb and flow with no real growth. 

“This virus is hitting companies when they’re vulnerable. They’re already cutting back on investment. To get hit on top of that with this virus really just makes it that much worse.” said Gallagher.

Reduced orders in sectors like civilian aircraft, primary metals and machinery foreshadow the industries most likely to be hit hard by standstill production lines and ruptured supply chains caused by the pandemic.

When COVID-19’s impact does show in March’s reports, the airline industry will take the first blow.

“They were getting affected in all of this before everybody else,” said Steven Ricchiuto, Chief U.S. Economist for Mizuho Securities USA.

Orders for nondefense aircraft and parts plummeted 66% in December after Boeing suspended production of its grounded 737 Max and went on to record no new orders of airplanes in January.

In the first week of February, American Airlines and Delta confirmed they’d canceled flights to China and Hong Kong in response to the disease’s spread. By mid-March, American Airlines had cut 55,000 flights and grounded 450 planes.

Workers know that sans a federal government bail-out, layoffs are next.

“They’re not telling us anything, but I know they’re coming,” said Donna Melbourne, a customer service associate and former union vice president who celebrated her 33rd year with American Airlines last week.

At first, Melbourne assumed her seniority would keep her safe. 

But Monday, the Wall Street Journal broke the news that U.S. airlines might enter a voluntary shut down and cancel all passenger flights. Now Melbourne, who started a 2-week vacation the same day, fears that when she tries to go back to work, she won’t have a job. 

Still, next month’s report may hold silver linings for select industries. 

With social-distancing recommendations moving thousands of employees to work from home setups, orders for new computers and technology for workers and their housebound children should see a bump in the coming months.

“Companies are rebuilding their infrastructure so that the bulk of employees can work at home and that definitely takes equipment,’ said Low.

Scott Kusel, President of Evertek Computer Corporation, said the California-based distributor has seen a recent spike in sales for laptops and monitors. He attributes the increase in orders to California’s March 19 mandate that all non-essential workers stay at home.

Low said his daughter’s large West Coast employer placed an order for 10,000 computers the day before San Francisco ordered residents to secure-in-place.

“And they’re probably going to have to step up and buy more,” said Low. 

The surge in tech spending could last. Companies are scrambling to put business continuity operations – disaster plans – in place to ensure their operations can weather the impact of COVID-19. That planning requires new applications, software and hardware, orders that could create an ongoing demand for computers and electronics.

“Through all of this, I think that could be an area of sustained strength,” said Gallagher.