WASHINGTON – New orders at U.S. factories rose 2.2 percent in October, in line with forecasts, as soaring demand for aircraft offset weakness in cars, computers, metals and electrical equipment, a government report showed on Tuesday.
Orders for durable goods, big-ticket items meant to last at least three years, rose 3.7 percent in October, an upward revision from the 3.4 percent increase reported last week.
Much of October's strength came from aircraft. New orders for transportation equipment rose 11.4 percent as demand for defense aircraft and parts shot up 142.0 percent and civilian aircraft orders rocketed 50.6 percent higher. Orders for autos and auto parts fell 1.0 percent, however.
When the transport sector is excluded, factory orders were up a more modest 0.6 percent, the Commerce Department said.
Orders for non-defense capital goods excluding aircraft, a proxy for business spending, rose 1.4 percent in October, nearly erasing September's 1.8 percent decline.
Non-durable goods orders rose 0.5 percent.
In addition to the drop in demand for cars, new orders for primary metals fell 0.3 percent, while fabricated metal products saw a 0.7 percent decline in orders. Computer orders fell 0.8 percent, while demand for electrical equipment and appliances slid 3.4 percent.
Factory shipments rose 1.0 percent in October, outpacing a 0.6 percent rise in inventories. That dropped the inventories-to-shipments ratio - a measure of how long it would take to deplete stocks at the current sales pace - to 1.17 months' worth. That matches August's record low -- indicating inventories are at the leanest level since records were established in 1992.