WASHINGTON – New orders at U.S. factories rose by a modest 0.1 percent in March, government data showed on Tuesday, confounding forecasts for a sharp drop after nondurable goods orders recorded a solid advance.
The Commerce Department (search) said it was the highest rise since December and compared with a revised 0.5 percent decline in factory orders (search) in February. This had initially been reported as a 0.2 percent gain.
Wall Street had forecast orders to fall 1.2 percent following weaker readouts from purchasing manager surveys amid soaring oil prices, which have dented household budgets and expectations for future income.
The Institute for Supply Management's (search) manufacturing index dipped 53.3 in April from 55.2 a month earlier.
Commerce data showed that demand for durable goods — big ticket items meant to last three years or more — fell a revised 2.3 percent compared with a 0.1 percent fall in February. March durable goods orders last week were originally report as down 2.8 percent fall.
Nondefense capital goods orders excluding aircraft, seen as a measure of business spending strength, fell 4.0 percent after declining 2.1 percent in February.
Nondurable goods, which make up a bit less than half of all factory orders, were up 2.8 percent after a 1.0 percent fall the previous month, revised down from an initially reported 0.2 percent reduction.
Stripping out transportation changed the factory orders number to a 1.3 percent advance while motor vehicle and parts orders fell 3.0 percent and demand for civilian aircraft nosedived by 22.7 percent.
Factory inventories were up 0.6 percent in March, Commerce said. The inventories-to-shipments ratio, an indication of how fast inventories would run empty at the current pace of shipment, retreated slightly to 1.25 months from 1.26 months in February.