Factory Orders Soar in August on Strong Demand

In another sign of a resurgence in manufacturing, U.S. factory orders vaulted ahead in August on the strength of higher demand for airplanes and electronics.

The 1.3% gain in factory orders was the 12th increase in the last 15 months, the Commerce Department said Wednesday. Analysts had generally expected factory orders to rise 0.6%. Even that would have been brisk.

“This is a pace that ensures significant production increases for the rest of the year and into 2000,” said economist Joel Naroff of Naroff Economic Advisers.

A jump in orders for airplane and aircraft parts contributed to a 4.8% increase in orders for all transportation products in August, the fourth monthly gain in a row. That was up from a 2.1% gain the month before.

Even excluding the volatile transportation category, factory orders would have risen a solid 0.8% in August.

Orders for electronic and other electrical equipment, a category that includes household appliances, grew by 0.8% in August, down from an 8% increase the month before.

The increase in overall factory orders occurred despite a 2.1% decrease in orders for industrial machinery and equipment, the sector that includes computers. That followed a hefty 10.5% gain in July.

Meanwhile, orders for durable goods--big-ticket items expected to last three years or longer--rose 1.2% in August, following a 4.3% gain in July.