Increased demand for aircraft gives bump to factory orders

Associated Press

WASHINGTON — Orders to U.S. factories managed a slight gain in July as a surge in demand for commercial aircraft helped offset widespread weakness in other areas.

Factory orders edged up 0.1 percent, the first increase after two months of declines, the Commerce Department reported Thursday. But the strength came in the volatile transportation sector. Excluding transportation, orders were down 1.5 percent, the biggest drop in this category in 16 months.

Manufacturing has been the standout performer so far in this recovery with American companies benefiting from stronger growth in China and other developing nations, which has helped offset sluggish U.S. consumer demand.

Concerns that manufacturing could be faltering were eased on Wednesday with a report from the Institute for Supply Management showing that its closely watched gauge of manufacturing activity posted a stronger-than-expected reading of 56.3 in August. Additionally, a manufacturing index for China also showed a solid gain and car sales in that country surged.

The Chinese activity was seen as encouraging for the global economy given that China is now the world’s second biggest economy. Rapid growth in China has provided a market for U.S. and other foreign manufacturers.

The small rise in U.S. factory orders reflected an increase of 0.4 percent in demand for durable goods, products expected to last at least three years. That represented a slight upward revision from a preliminary report last week showing durable goods up 0.3 percent in July.