April Factory Orders, Building Outlays Rise

Associated Press

Orders to U.S. factories for manufactured goods rose 0.1% in April while construction spending increased 0.8%, the Commerce Department said Monday.

Analysts called the economic indicators generally lackluster, but they pointed out some bright spots within the figures.

The department said new orders on a seasonally adjusted basis edged up to $193.18 billion in April following a 2.8% drop in March.

Despite the increase, factory orders are considered by many analysts to be a weak spot in the U.S. economy, reflecting the persistently high volume of imports that are depressing many American industries.


Allen Sinai, chief economist for the New York investment firm Shearson Lehman Bros., said the significant aspect of the factory order figures was the 0.4% rise in orders for non-durable goods, “probably reflecting strong consumer spending. It was a welcome sign of relief.” The increase follows three months of declines.

Non-durable goods in factory orders such as chemicals are often those items used in or related to a product that is ultimately bought by consumers. In March, orders for non-durable goods fell 3%.

Demand for durable goods--items expected to last three or more years--fell 0.2% in April following a 2.7% dip in March and a 0.6% decline in February.

By comparison, total U.S. factory orders for manufactured goods reached a high in December of $201.2 billion, were flat in January, declined 1.3% in February and declined 2.8% in March.


The closely watched category of non-defense capital goods declined 1.8% in April following a drop of 7.3% in March.

This category is watched for signals that it can give about industry plans to expand and modernize production facilities.

The largest increases were in fabricated metals, up 9.3%, and non-electrical machinery, up 3.9%. The biggest decline was in electrical machinery, down 11%.

In a separate report, the department said new construction totaled $356.7 billion at a seasonally adjusted annual rate in April, up from $353.9 billion in March. The February level was $358.8 billion, the highest ever.


Construction of industrial, office and other non-residential commercial buildings fell to $86.3 billion in April following a March level of $87.5 billion.

However, new private construction rose to a $287.3-billion annual rate in April, compared to $284.8 billion for March. Residential building construction increased 3% to $159.6 billion in April, the highest this year.