US factory orders unchanged in February

[WASHINGTON] New orders for US-made goods were unexpectedly flat in February, and could remain weak as a global coronavirus outbreak strains supply chains and undercuts the manufacturing sector.

The Commerce Department said on Thursday the unchanged reading in factory orders followed a 0.5per cent decline in January. Economists polled by Reuters had forecast factory orders would increase 0.2 per cent in February.

The Institute for Supply Management (ISM) reported on Wednesday that its index of national factory activity fell to a reading of 49.1 in March from 50.1 in February. A reading below 50 indicates contraction in the manufacturing sector, which accounts for 11 per cent of the US economy.

As well as causing disruptions in supply chains, the coronavirus pandemic has shut down demand, with the transportation industry almost crawling to a halt, and restaurants, bars and other social venues shutting.

The government also reported that orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, fell 0.9 per cent in February instead of declining 0.8 per cent as reported last month.

Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, decreased 0.8 per cent in February, rather than falling 0.7 per cent as previously reported. 

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REUTERS