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US factory orders post largest increase in seven months
[WASHINGTON] New orders for US-made goods rose by the most in seven months in March amid strong demand for transportation equipment, but rising inventories and a marginal rebound in unfilled orders pointed to slower manufacturing activity.
Factory goods orders rebounded 1.9 per cent, also boosted by orders for computers and electronic products, the Commerce Department said on Thursday. That was the largest rise since August 2018. Data for February was revised up to show factory orders slipping 0.3 per cent instead of falling 0.5 per cent as previously reported.
Economists polled by Reuters had forecast factory orders would rise 1.5 per cent in March. Factory orders increased 1.7 per cent compared to March 2018.
Inventories at factories increased 0.4 per cent in March. The stock of unsold goods has increased in 28 of the last 29 months. Unfilled others at factories rose 0.2 per cent in March after falling 0.2 per cent in February.
Manufacturing, which accounts for about 12 per cent of the economy, is being pressured by sluggish global demand, continued uncertainty over trade talks between the United States and China, and a large inventory build. Fading depreciation provisions for capital equipment as a result of the Trump administration's tax restructuring has also slowed business investment, further squeezing manufacturing.
A survey on Wednesday showed a measure of national factory activity fell to a 2-1/2-year low in April.
In March, orders for machinery edged up 0.1 per cent after falling 0.9 per cent in the prior month. Orders for electrical equipment, appliances and components rose 0.5 per cent while those for computers and electronic products jumped 2.2 per cent.
Transportation equipment orders surged 7.0 per cent in March after falling 2.9 per cent in the prior month. Orders for civilian aircraft and parts soared 31.0 per cent. Motor vehicles and parts orders increased 1.5 per cent.
The Commerce Department also said March orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 1.4 per cent instead of the 1.3 per cent jump reported last week.
Orders for these so-called core capital goods were unchanged in February. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, were unchanged in March rather than slipping 0.2 per cent as previously reported.
Core capital goods shipments rose 0.3 per cent in February. Business spending on equipment spending stalled in the first quarter.