Non-Transport Factory Orders Grew in December

U.S. factory orders fell slightly in December as a result of a large decline in aircraft orders. But orders for non-transportation goods and capital equipment showed significant increases.

Overall demand for durable goods fell 2.5 percent in December after a 0.1 percent decline in November. The weakness in both months came from big declines in orders for aircraft, a volatile category subject to wide swings. Excluding transportation, factory orders rose 0.5 percent after a 4.5 percent increase in November.

Orders for U.S. capital equipment, a key indicator of business investment plans, rose 1.4 percent in December after a 3.1 percent increase in November that was larger than previously estimated, the Commerce Department said in its monthly report on durable goods manufacturing.

By The Numbers: JOC-ECRI Industrial Price Index

Orders for commercial aircraft fell to $24 million after a 59.6 percent November plunge from October's $12.4 billion level. Overall transportation demand fell 12.8 percent in December as the big decline in commercial aircraft and a smaller drop in military aircraft was offset somewhat by a 1.7 percent increase in orders for motor vehicles and parts.

The 0.5 percent rise in orders outside of transportation was led by a 10.6 percent increase in demand for machinery. Orders for communications equipment increased 3.6 percent.

Manufacturing activity has been expanding amid rising export sales, helped by a decline in the value of the dollar, and strengthened by domestic demand.

Inventories of manufactured durable goods rose 0.7 percent in December, the 12th consecutive monthly increase, after a 0.9 percent increase in November.

-- Contact Joseph Bonney at jbonney@joc.com.