Factory orders post moderate 1.2 percent April increase led by surge in demand for aircraft

WASHINGTON – WASHINGTON (AP) — Orders to U.S. factories posted a moderate increase in April as a big surge in demand for commercial aircraft offset weakness in a number of other areas.

The Commerce Department said Thursday that orders for manufactured goods increased 1.2 percent in April, a slowdown from a 1.7 percent rise in March. Excluding transportation, orders actually fell 0.5 percent, the poorest showing in 13 months. However, that drop followed a big 3.8 percent surge in March which had been the largest advance in six years.

So far in this recovery, the manufacturing sector has been one of the star performers, helped by a strong rebound in domestic demand and rising export sales. However, economists worry that the debt crisis in Europe could slow sales in one of America's biggest overseas markets.

The 1.2 percent April increase in orders was the slowest advance since orders had risen by just 0.4 percent in February and also fell below economists' forecasts.

Demand for durable goods, items ranging from airplanes to appliances that are expected to last at least three years, rose 2.8 percent, slightly lower than the 2.9 percent the government estimated in a preliminary report last week.

Demand for nondurable goods, products ranging from food and clothing to chemicals and gasoline, edged down 0.1 percent in April after a big 3.1 percent increase in March.

In the durable goods categories, transportation orders shot up 15.8 percent, reflecting a huge 228.1 percent increase in orders for commercial aircraft. This volatile category had fallen by 71.1 percent in March.

The rebound resulted from a better month at Boeing Co. which booked orders for 35 new 777 planes in April. Last year, Boeing was cutting production. But with demand now rising as the global economy recovers, Boeing has said it plans to speed up production of the 777 as well as its large 747 next year.

Orders for motor vehicles rose 2.7 percent in April following a 5 percent gain in March. Auto companies on Wednesday reported that sales were up again in May, marking the seventh consecutive month that auto sales have risen compared to the same month a year ago.

Outside of transportation, orders fell in a number of categories that had enjoyed big gains in the previous month. Sales posted a decline of 1.7 percent for primary metals such as steel and were down 11 percent for heavy machinery.