Factory Orders Up Unexpectedly
Orders at U.S. factories unexpectedly rose in March, led by the biggest jump in demand for petroleum and coal products in more than a decade of records.
The 0.1% increase to $378.2 billion for all factory orders followed a 0.5% decrease in February, previously reported as an increase, the Commerce Department said Tuesday. Excluding transportation equipment, factory orders rose 1.3% after falling 0.6%. The median forecast among economists surveyed called for a decline in all orders.
The increase suggests that manufacturing, which accounts for about 13% of the economy, will give some support to expansion after growth cooled in the first quarter. The contribution will be limited, because orders for autos and capital equipment fell, suggesting a slowdown in business and consumer spending. Military orders surged.
Orders for capital goods excluding aircraft, a proxy for future business investment, fell 4% in March after falling 2.1% in February, the report showed. Those bookings so far this year are still 10.4% higher than they were in January-March 2004.
Shipments of such goods fell 0.8% after declining 2.6%. Equipment and software investment grew at a 6.9% annual rate in the first quarter, the slowest in two years, after rising 18.4% in the fourth quarter, the Commerce Department said last week.
Orders for nondurable goods, which include industrial chemicals, drugs, papers and textiles, rose 2.8% in March after falling 1% in February. Orders for petroleum and coal products rose 18%, a $5.6-billion increase that was the largest on record, to $36.5 billion. Orders for tobacco rose 10%, and orders for paints, coatings and adhesives rose 4.3%.
Bookings for all durable goods, which account for about 55% of all factory orders, fell 2.3% in March, the biggest drop since April 2004, after falling 0.1% in February, the report said.
The decline was led by reduced orders for transportation equipment, which fell 7.3% in March after falling 0.3% the previous month. Civilian aircraft orders fell 23% after rising 29%. Orders for vehicles and parts fell 2.9% after falling 2.7%.
