Orders to Manufacturing Plants Hit 5-Year High in 1993

Orders flowed to the nation’s manufacturing plants at the briskest pace in five years during 1993, the Commerce Department said Thursday, indicating that the economy continued to gain momentum.

New orders in December grew 1.2% to a seasonally adjusted $266 billion, a fifth straight monthly increase. For all of 1993, orders climbed 5.9% to a total $3.1 trillion, the strongest rise since 8.4% in 1988.

Economist James Padina of First Interstate Bancorp in Los Angeles said a home building and sales boom and brisk sales of new cars late last year should keep the manufacturing sector growing.

“In terms of output, this momentum should not die down quickly, and employment gains should be at least a little better this year than was the case in 1993,” Padina said.

A separate report from the Labor Department showed claims for unemployment pay leaped by 59,000 in the final week of January to 422,000, the highest level in a year and a half. But analysts discounted the significance of the figures because severe winter weather and the California earthquake may have distorted them.

Labor’s report today on January employment will be watched much more intensely for signs that a solid pickup in the manufacturing sector is paying off in better job prospects.

The four-week moving average of claims, which gives a better indication of labor market conditions than the more volatile weekly number, rose to 377,250 last week, up from 361,000 the prior week, the department said.

The 1.2% gain in December factory orders followed a revised 1.7% increase in November business. The last time orders fell was in July, when they dipped 1.9%. They have risen every month since then.

Manufacturing gains were concentrated among industries that make durable goods, especially automobiles. But surging sales of new and used homes, boosted by low interest rates, also help companies that make household goods, furniture and appliances.

Manufacturing plants report that business continues to grow. The National Assn. of Purchasing Management said business picked up for a fifth straight month in January, and rising orders lead the way.

Orders for transportation equipment were the strongest individual component in December, up 2.9% after increases of 5.1% in November and 5.7% in October.

Shipments of motor vehicles and parts rose 3.5% after a 4.2% November pickup.

Factory Orders

Annual percent change: +5.9% Source: Commerce Department