Jeff Kowalsky | AFP | Getty Images
Khokeyma Reed assembles a watch at the Shinola Watch factory on January 4, 2017 in Detroit, Michigan.
Orders to U.S. factories rose in February amid a surge in demand for commercial aircraft, but a key category that tracks business investment spending slipped for the first time in five months.
Factory orders increased 1 percent in February after a 1.5 percent gain in January, the Commerce Department reported Tuesday. Much of the strength stems from a second straight month of booming demand for commercial aircraft. But a key category that serves as a proxy for business investment slipped 0.1 percent. It was the first decline since investment orders fell by 1.5 percent in September.
American manufacturers are slowly recovering from a weak patch caused by falling demand for American exports, reflecting weak economies overseas and the strength of the dollar which makes U.S. products cost more in foreign markets.
Orders for durable goods, items such as autos and airplanes designed to last at least three years, rose 1.8 percent in February after a 2.4 percent gain in January. Demand for nondurable goods, items ranging from food to paper and chemicals, edged up a slight 0.2 percent following a 0.6 percent January increase.
The strength in durable goods was led by a 47.5 percent increase in orders for commercial aircraft, a gain that followed an even bigger 83.2 percent rise in January in this volatile sector. Demand for military aircraft fell 12.8 percent after a big gain in January.
Demand was also up for primary metals such as steel, computers, construction machinery and oilfield drilling equipment.
On Monday, the Institute for Supply Management reported that American factories expanded for a seventh straight month in March but at a slightly slower pace than February.
American factories have bounced back after being hurt in early 2016 and late 2015 by the weakness in exports and also cutbacks in the energy industry, a decline that reflected falling oil prices.
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— CNBC’s Lauren Thomas contributed to this report.
Source : CNBC