US Factory Orders Post Decline in July
New orders for US-made goods recorded their biggest drop in nearly 3 years in July, but orders for capital goods were stronger than previously reported, pointing to robust business spending at the start of Q-3.
Factory goods orders fell 3.3% amid a slump in demand for transportation equipment, the US Commerce Department said Tuesday. That was the biggest decliner since August 2014.
June’s data was revised to show orders rising 3.2% instead of the previously reported 3.0%.
Economists had forecast factory orders declining 3.3% in July.
Manufacturing, which makes up about 12% of the US economy, is strengthening even as the boost from Crude Oil and Nat Gas drilling is starting to fade as ample supplies restrain Crude Oil prices.
Tuesday’s report also showed orders for non-defense capital goods excluding aircraft – seen as a measure of business spending plans increased 1.0% in July instead of gaining 0.4% as reported last month.
Orders for these core capital goods slipped 0.1% in June. Shipments of core capital goods, which are used to calculate business equipment spending in the GDP (gross domestic product) report, jumped 1.2% instead of the previously reported 1.0% rise.
In July, orders for machinery fell 0.9% after gaining 0.5% in June.
Mining, Oil field and Gas field machinery bookings rose 1.7% after climbing 2.5% in June.
Orders for transportation equipment sagged 19.2%, the biggest drop since August 2014. That reflected a 70.8% dive in civilian aircraft orders. Boeing (NYSE:BA) has reported on its website that it received only 22 aircraft orders in July, sharply down from 184 in the prior month.
Motor vehicle orders fell 0.9% after being unchanged in June. Motor vehicle production has slumped in recent months as declining sales left manufacturers with an inventory overhang.
Production could get a boost from an anticipated spike in demand for automobiles as residents in storm-ravaged Texas replace flood-damaged vehicles.
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