Orders to U.S. Factories Up 4.1% in December--Best Rise in 6 Months

Orders to U.S. factories for manufactured goods surged 4.1% in December, the biggest rise in six months, the government said today.

The Commerce Department said orders for durable and non-durable goods climbed to a seasonally adjusted $237.6 billion. Orders had increased by 0.5% in November and 2.0% in October.

For 1988, orders for manufactured goods were up a strong 9.7% to $2.66 trillion after a 7.1% increase during the previous year.

Last year’s showing was the best since a 12.1% increase in 1979.

American manufacturers have enjoyed an export-led rebound the last two years as a decline in the value of the dollar against foreign currencies made American products more competitive overseas.

December’s 4.1% rise was the biggest monthly gain since a 5.4% in June.

The volatile category of defense orders surged 19% in December to $10 billion after plunging 21.5% during the previous month.

Excluding the military, manufacturers’ orders in December still were up 3.6% after a 1.6% gain in November.

Transportation orders, another sector subject to wide swings, jumped 19.7% to $38.8 billion after falling 7.2% in November. The motor vehicle, aircraft and shipbuilding industries all showed large gains.

Excluding transportation, orders were up 1.6% in December after a 1.8% rise in November.

Key Category Up 8.2%

Meanwhile, the key category of non-defense capital goods, considered a barometer of industry investment plans, rose 8.2% to $38.7 billion in December.

While many analysts are expecting a slowdown in economic growth in the coming year, 1988 closed on a strong note, with many year-end reports showing vigorous economic activity during December.

“Big ticket” durable goods--items expected to last three years or longer--posted a robust 6.4% increase in December to a seasonally adjusted $131 billion.

Non-durable goods, meanwhile, were up 1.4% to $106.6 billion, with the largest gains occurring in rubber and plastics, paper and apparel.