US factory orders rebound in November on commercial aircraft demand
Factory orders increased 2.7% after an upwardly revised 1.2% decline in October
[WASHINGTON] New orders for US factory goods rebounded in November as demand for commercial aircraft surged, though growth in business spending on equipment likely moderated in the fourth quarter.
Factory orders increased 2.7 per cent after an upwardly revised 1.2 per cent decline in October, the Commerce Department’s Census Bureau said on Thursday (Jan 29). Economists polled by Reuters had forecast factory orders increasing 1.6 per cent after a previously reported 1.3 per cent drop in October. Orders advanced 3.4 per cent on a year-on-year basis in November.
The report was delayed by the 43-day shutdown of the federal government. President Donald Trump’s sweeping import tariffs have depressed a large segment of manufacturing, which accounts for 10.1 per cent of the economy, though a few industries have received a lift from the protection against foreign competition.
An artificial intelligence boom has supported the technology sector. Economists are cautiously optimistic of a broad improvement in manufacturing this year as the drag from import duties eases and tax legislation, which made bonus depreciation permanent among other perks, takes effect.
Commercial aircraft orders soared 97.6 per cent in November. There were solid increases in orders for electrical equipment, appliances and components as well as fabricated metal products. Machinery orders rose 0.3 per cent while those for computers and electronic products were unchanged.
The Census Bureau also reported that orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.4 per cent in November instead of 0.7 per cent as was initially reported earlier this week.
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Shipments of these so-called core capital goods rose 0.2 per cent rather than 0.4 per cent as reported this week. Business investment in equipment expanded at a 5.2 per cent rate in the third quarter, contributing to the fastest economic growth pace in three years. REUTERS
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