Demand for Planes Helps Lift Factory Orders by 2.9% in May

U.S. factories saw orders rise 2.9% in May -- the biggest gain in 14 months -- with most of the strength reflecting robust demand for airplanes and parts, the Commerce Department reported Tuesday.

The advance came after the 0.7% increases registered in both March and April.

Although the pickup in May was welcome, the latest snapshot of manufacturing activity showed that results across various sectors were uneven.

New bookings for machinery and computers fell. Orders for cars and primary metals, including steel, were flat. But demand for airplanes, household appliances and furniture posted gains. Orders for food products and clothing also climbed.

“On average manufacturing is doing OK, but with a lot of individual industry variation,” said Ken Mayland, president of ClearView Economics.

The overall performance in May was close to the 3% increase in orders to factories that economists were forecasting before the report was released.

Excluding orders for airplanes and other transportation equipment, however, factory orders fell 0.1%. This category saw orders decline by 0.4% in April.

Manufacturing, hardest hit by the 2001 recession, has sometimes had a bumpy road to recovery. Still, factory activity is considered to be in good shape despite the toll of rising energy prices and increases in the costs of some raw materials.

The 2.9% increase in overall orders to U.S. factories in May was the largest since March 2004, when new bookings rose 5%.

In May, orders for all durable goods -- costly manufactured items expected to last at least three years -- rose 5.5%, up from 1.5% in April.

Meanwhile, demand for nondurable goods, including food and clothing, edged up 0.1% in May. That followed a 1% drop in April. Shipments, a barometer of current demand, were flat in May after rising 0.7% in April.