US factory orders slump in April

Manufacturing, which accounts for 10.2% of the economy, has been pressured by Trump’s aggressive tariffs

US factory orders fell 3.7 per cent after an unrevised 3.4 per cent jump in March. PHOTO: REUTERS

Published Tue, Jun 3, 2025 · 10:53 PM

[WASHINGTON] New orders for US-manufactured goods dropped sharply in April and business spending on equipment appeared to have lost momentum at the start of the second quarter as the boost from front-loading of purchases ahead of tariffs faded.

Factory orders fell 3.7 per cent after an unrevised 3.4 per cent jump in March, the Commerce Department’s Census Bureau said on Tuesday (Jun 3). Economists polled by Reuters had forecast factory orders declining 3.1 per cent. They rose 2 per cent on a year-on-year basis in April.

Manufacturing, which accounts for 10.2 per cent of the economy, has been pressured by President Donald Trump’s aggressive tariffs.

An Institute for Supply Management survey on Monday showed manufacturing contracted for a third straight month in May and suppliers took the longest time in nearly three years to deliver inputs to factories.

Trump sees the tariffs as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining industrial base, a feat that economists argued was impossible in the short term because of labour shortages and other structural issues.

Commercial aircraft orders plunged 51.5 per cent in April. Orders for motor vehicles, parts and trailers dropped 0.7 per cent, helping to depress transportation equipment orders by 17.1 per cent. Orders for computers and electronic products gained 1 per cent, while those for electrical equipment, appliances and components slipped 0.3 per cent.

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The survey suggested manufacturing, which is heavily reliant on imported raw materials, had not benefited from the de-escalation in trade tensions between US-China.

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Inflation-adjusted personal spending rose 0.1 per cent after rising 0.7 per cent a month earlier.

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Companies ranging from airlines, retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025.

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The economy’s primary growth engine – consumer spending – advanced 1.2 per cent, down from an initial estimate of 1.8 per cent and the weakest pace in almost two years.

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Machinery orders rose 0.6 per cent. Excluding transportation, orders fell 0.5 per cent, matching March’s decline.

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, decreased 1.5 per cent in April rather than 1.3 per cent as estimated last month.

Shipments of these so-called core capital goods fell by an unrevised 0.1 per cent. Business spending on equipment rebounded sharply in the first quarter, largely driven by front-running of information processing equipment ahead of tariffs. REUTERS

US economy

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