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Factory Orders Rise In December

Thu, 02/03/2011 - 9:19am
Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- Orders to U.S. factories rose in December, pushed up by stronger demand from businesses for machinery and communications equipment.

Factory orders increased 0.2 percent in December, the Commerce Department said Thursday. They have risen in five of the past six months.

Orders totaled $436 billion in December, a level economists consider to be healthy after a deep recession. They are 23.6 percent higher than the lowpoint during the downturn hit in March 2009.

Manufacturing has been one of the standout performers in the current recovery and economists predict further gains this year.

Economists expect businesses will take advantage of tax breaks passed by Congress in December to boost their spending on new equipment, and that will fuel manufacturing growth. Those tax breaks expire after 2011.

For December, orders for durable goods, items expected to last at least three years, fell 2.3 percent.

However, much of that weakness reflected a huge plunge in demand for commercial aircraft, a very volatile component. That pulled the transportation category down 12.7 percent. But demand for motor vehicles and parts rose 1.7 percent.

Excluding transportation, orders rose 1.7 percent in December. Orders in a category considered a good indicator of business investment plans rose 1.9 percent, following a 3.3 percent gain in November.

For December, orders were up sharply for machinery and communications equipment.

Orders for nondurable goods, items such as petroleum products, paper and food, rose 2.3 percent in December.

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