Factory Orders Advance 0.3% in November

New orders received by American factories, a key indicator of economic activity, increased a modest 0.3% in November after a strong 2% jump in October, the Commerce Department said Wednesday.

But economists said the nation’s industrial sector was stronger than shown by the November orders, which rose despite a sharp drop in orders for military hardware, such as tanks and missiles, that fluctuate widely from month to month.

Non-defense orders rose a more robust 1.1%, following a 0.6% October gain, the department said.

Total orders in November were a seasonally adjusted $227.73 billion, up 8.7% from a year earlier.

‘Looks Healthy’

The biggest order increase in November was for electrical machinery, particularly defense communications equipment, while the largest decline was in orders for transportation equipment other than commercial aircraft, the department said.

“The industrial sector still looks very healthy,” said economist David Wyss of Data Resources Inc. in Lexington, Mass.

American manufacturers, who have been capitalizing on booming export sales and business spending on new equipment, also are recapturing domestic sales from foreign companies in chemicals, textiles and primary metals, Wyss said.

A vibrant manufacturing sector will lead the economy through its continuing expansion, now in its seventh year, but with less vigor than in 1988, economists said.

In one sign of slowing, the index of leading indicators, the government’s main barometer of future economic activity, registered a 0.2% decline in November, the department reported last week.

While economists expect grh in exports and capital spending to slow in 1989, there has been little evidence so far that the industrial sector is slowing, economists said.

“We’re not getting any reports from manufacturers that orders slowed significantly in either November or December,” said Jerry Jasinowski, chief economist for the National Assn. of Manufacturers.