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US factory orders increase broadly in February
[WASHINGTON] New orders for US-made goods rebounded in February, boosted by strong demand for transportation equipment and a range of other products, pointing to a strengthening manufacturing sector.
Factory goods orders increased 1.2 per cent, nearly unwinding January's revised 1.3 per cent decline, the Commerce Department said on Tuesday.
Economists polled by Reuters had forecast factory orders rising 1.7 per cent in February after a previously reported 1.4 per cent drop in January. Orders surged 7.9 per cent on a year-on-year basis in February.
Orders for transportation equipment soared 7.0 per cent, lifted by a 26.2 per cent jump in the volatile orders for civilian aircraft. There were also increases in orders for machinery, which rose 1.2 per cent after slipping 0.2 per cent in January.
Orders for mining, oil field and gas field machinery climbed 1.8 per cent. Orders for motor vehicles shot up 1.5 per cent.
Orders for electrical equipment, appliances and components surged 3.4 per cent while bookings for computers vaulted 3.5 percent.
Manufacturing, which accounts for about 12 percent of US economic activity is being supported by strong domestic and global demand, but a shortage of skilled workers and capacity constraints could hurt factory output.
A survey on Monday showed a slight ebb in sentiment among manufacturers amid rising concerns over labor shortages and the supply chain. Manufacturers also reported that tariffs on steel and aluminum imports imposed by President Donald Trump in early March were raising prices, "causing panic buying" and "leading to inventory shortages for non-contract customers." Trump imposed 25 per cent tariffs on steel imports and 10 per cent for aluminum to shield domestic industries from what he has described as unfair competition from other countries.
The Commerce Department revised February orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, to show them rising 1.4 per cent instead of the 1.8 per cent jump reported last month.
Orders for these so-called core capital goods fell 0.3 per cent in January. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased 1.4 per cent in February as reported last month.
Core capital goods shipments were unchanged in January.