Manufacturing sector gets needed boost in December

Associated Press

WASHINGTON — Stronger demand for semiconductors, household appliances and machinery helped lift factory orders in December, suggesting the nation’s beleaguered manufacturers may be coming out of their long slump.

After falling by 4.3 percent in November, orders to U.S. factories for manufactured goods rose by 1.2 percent in December, the second increase in the last three months, the Commerce Department reported Tuesday.

Manufacturers have been mired in a slump for the last year and a half and have been hardest hit by the recession that hit the national economy in March. To cope, they have sharply cut production, trimmed hours and laid off workers. Last year, factories shed 1.3 million jobs, or about 7 percent of their workforce.

But Tuesday’s report "suggests that the manufacturing recession has bottomed, and the light at the end of the 18-month-long tunnel is getting brighter," said Richard Yamarone, economist with Argus Research Corp.

The latest snapshot of industrial activity, taken with other recent data, indicates the worst of the recession may be over for manufacturers, economists said.

The Institute for Supply Management reported last week that its index of business activity edged higher in January. The government reported last week that durable goods orders to factories rose by 2 percent in December, greater than expected.

"While I would not bet the house on a manufacturing recovery in the first quarter, the odds are clearly moving in that direction," said David Huether, chief economist for the National Association of Manufacturers. "Since we are in an investment-led recession the outlook for durable goods is a reliable indicator of the path of recovery."

Before manufacturing can fully recover, though, businesses will have to crank up investment again, and foreign companies and consumers must increase their spending on American-made goods, which would boost U.S. exports, economists said.

"For the factory sector to really get moving again, we have to have a renaissance of business investment, which tends to lag the economy and doesn’t tend to suddenly spring to life," said economist Clifford Waldman of Waldman Associates.

In December, orders for the category that includes computers and electronics products rose by 3.1 percent, on top of a 0.8 percent gain in November.

After falling by 3.7 percent in November, semiconductors posted a strong 12.7 percent increase, a good sign for the high-tech sector, which took a big hit when companies scaled back capital spending in response to the economic slump.

Orders for household appliances rose by 2.8 percent in December, following a 6.3 percent advance; orders for electrical lighting equipment rose by 2.5 percent, after falling by 7.4 percent in November.

Orders for machinery increased 0.8 percent, on top of a 2 percent rise.

For transportation equipment, orders grew by 3.6 percent, after plunging by 20 percent the month before. December’s increase was mostly due to orders for missiles and space equipment, the government said. Orders for cars dipped by 0.2 percent in December as free financing and other incentives waned.

Copyright ©2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Customers enter and exit the Costco on Dec. 2, 2022, in Lake Stevens. (Olivia Vanni / The Herald)
Costco stores could be impacted by looming truck driver strike threat

Truck drivers who deliver groceries and produce to Costco warehouses… Continue reading

Two Washington State ferries pass along the route between Mukilteo and Clinton as scuba divers swim near the shore Sunday, Oct. 22, 2023, in Mukilteo, Washington. (Ryan Berry / The Herald)
Ferry system increases ridership by a half million in 2024

Edmonds-Kingston route remains second-busiest route in the system.

Jasmine Donahue talks about being a place for people leave messages when looking for family members, friends or loved ones on the street on Thursday, Jan. 9, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Everett extends deadline for homeless service facing closure

Hope ‘N Wellness must now comply with city zoning laws by April 30. The organization is “grateful,” its owner said, but still hopes for a permanent solution.

New Greater Everett Chamber of Commerce CEO CEO Wendy Poischbeg speaks at a kick off event on Wednesday, Jan. 15, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
‘Everett Rising’: Wednesday’s chamber luncheon to showcase a new era of growth.

The Greater Everett Chamber of Commerce is beginning its efforts… Continue reading

The Edmonds School District building on Friday, Feb. 14, 2025 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Edmonds School District faces estimated $8.5 million deficit

The shortfall is lower than previous years, but the effects are “cumulative,” Superintendent Rebecca Miner said.

Robin Cain with 50 of her marathon medals hanging on a display board she made with her father on Thursday, Jan. 2, 2025 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Running a marathon is hard. She ran one in every state.

Robin Cain, of Lake Stevens, is one of only a few thousand people to ever achieve the feat.

People line up to grab food at the Everett Recovery Cafe on Wednesday, Dec. 4, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Coffee, meals and compassion are free at the Everett Recovery Cafe

The free, membership-based day center offers free coffee and meals and more importantly, camaraderie and recovery support.

Hundreds rally against Trump on Presidents Day in Everett

People lined Broadway with signs and flags, similar to other protests across the country

The Everett Wastewater Treatment Plant along the Snohomish River on Thursday, June 16, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Everett water, sewer rates could jump 43% by 2028

The rate hikes would pay for improvements to the city’s sewer infrastructure.

The bond funded new track and field at Northshore Middle School on Thursday, Oct. 24, 2024 in Bothell, Washington. (Courtesy of Northshore School District)
Northshore School District bond improvements underway

The $425 million bond is funding new track and field complexes, playgrounds and phase one of two school replacements.

Alina Langbehn, 6, center, and Vera A., 6, right, sit on a swing together at Drew Nielsen Neighborhood Park after school on Tuesday, Jan. 28, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Everett council votes to renovate Drew Nielsen Park

Construction on the $345,000 upgrade could start as early as this fall.

Northshore School District bus driver Stewart O’Leary pictured next to his buses shattered drivers side windshield on Friday, Feb. 14, 2025 in Bothell, Washington. (Olivia Vanni / The Herald)
‘Put me in, coach’: Bus driver back at work after struck by metal bar

Stewart O’Leary, a Northshore employee, has received national attention for his composure during a frightening bus trip.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.