WASHINGTON – Orders to U.S. factories plunged by the largest amount in 5 1/2 years in January, reflecting a big drop in demand for airplanes.
The Labor Department reported that orders for manufactured goods fell 4.5 percent last month, the first decline after three consecutive gains, and the biggest drop since an 8.7 percent plunge in July 2000.
The weakness came from a plunge in orders for commercial and military airplanes. Excluding the volatile transportation sector, factory orders posted a solid 1.6 percent increase, the best showing in five months. Analysts said this advance showed that manufacturing was doing well at the start of the new year.
Total orders for transportation products dropped 31 percent in January as demand for autos edged down 0.4 percent and orders for commercial aircraft fell by 68.3 percent. Orders for military aircraft dropped by 20.9 percent.
The big declines in aircraft orders were viewed as returning demand to a more normal level after huge gains in prior months.
Orders for durable goods, items ranging from cars to computers, recorded a 9.9 percent decline in January, a slight improvement from the 10.2 percent drop that the government initially estimated.
Orders for nondurable goods, everything from food to clothing to petroleum products, posted a 2.2 percent increase in January following smaller gains of 0.5 percent in December and 0.9 percent in November.