US factory orders unexpectedly rise in September

NEW orders for US-made goods unexpectedly rose in September, though manufacturing remains constrained by input shortages.

The Commerce Department said on Wednesday that factory orders increased 0.2 per cent in September. Data for August was revised down to show orders rising 1.0 per cent instead of 1.2 per cent as previously reported. Economists polled by Reuters had forecast factory orders unchanged. Orders gained 17.6 per cent on a year-on-year basis.

Manufacturing, which accounts for 12 per cent of the economy, is being driven by still-strong demand for goods despite spending shifting back to services. Businesses are rebuilding depleted inventories, but shortages of labour and raw materials stemming from the Covid-19 pandemic remain challenges. The widespread shortages restrained economic growth to its slowest pace in more than a year in the third quarter.

An Institute for Supply Management survey on Monday showed manufacturing activity slowed in October, with all industries reporting record-long lead times for raw materials.

The rise in factory goods orders in September was led by machinery, primary metals and fabricated metal products. But orders for computers and electronic products, transportation equipment as well as electrical equipment, appliances and components fell, likely because of a global chip shortage.

Shipments increased 0.6 per cent after gaining 0.1 per cent in August.

Inventories at factories shot up 0.8 per cent in September. Unfilled orders at factories rose 0.7 per cent after rising 0.9 per cent in August.

The Commerce Department also reported that orders for non-defence capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.8 per cent as reported last month. REUTERS