New orders for factory-made goods see steepest drop in three years
Demand for manufactured products posted its largest decline in three years in March, according to a government report released the day after several private reports found major gains in U.S. factory activity.
The Commerce Department said that new orders slumped 1.5%, falling $7.1 billion to $460.5 billion, after growing 1.1% in February. That’s the steepest drop since March 2009.
Demand for transportation equipment suffered the most dramatic plunge, diving 12.6%. Strong auto sales earlier in the year cooled off last month as automakers such as Hyundai, Kia and Nissan watched their previously double-digit gains shrink.
Without transportation, new orders overall were flat. Durable goods -- products designed to last at least three years -- saw demand drop 0.8%.
New orders for some other products fell precipitously. With airlines struggling, demand for nondefense aircraft and parts slid 47.6%, even as manufacturers such as Boeing reported huge spikes in profit.
A transition away from natural gas extraction by major companies such as Hallliburton caused a 47.3% collapse in orders for mining and oil and gas field machinery.
Wednesday’s data were a departure from more optimistic reports released Tuesday, which many analysts had taken as proof that manufacturing continued to be the driving force of the recovery.
The Institute for Supply Management said its index of manufacturing activity reached a 10-month high in April, with new orders at their highest level in a year. Asset management firm Manning & Napier said that for the first time in two decades, manufacturing employment as a percentage of total nonfarm employment has stopped falling.
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