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Orders for U.S. Manufactured Goods Tumble

Orders for manufactured goods in the U.S. fell sharply in January with most analysts blaming the low numbers on a decline in sales for transporation products.

The Commerce Department said today that orders to U.S. factories for big-ticket manufactured goods fell by the largest amount in more than five years in January. The government agency reported that orders for everything from cars to computers fell by 10.2 percent. It is a significantly larger decline than expected.

In addition, there was a 68.2 percent reduction in orders for commercial aircraft, which is representative of a fall off in sales at Boeing. In published reports, analysts said the overall decline in manufacturing is overstated because it was heavily influenced by the volatile aircraft sector.

In fact, once airplanes, cars and other transportation products are taken out of the equation, there is actually a 0.6 percent rise in manufacturing goods orders. That number follows 1.9 percent increase in December.

According the Associated Press, many economists are looking for a sizable rebound in the first three months of 2006, with some forecasting growth will top 5 percent at an annual rate. Part of that strength is expected to come from manufacturing, which is expected to do well as businesses, bolstered by rising sales and strong profits, step up spending to expand and modernize.

For January, transportation product orders were down 31.2 percent to $54 billion. Orders for automobiles and parts were reduced by 3.3 percent. Meanwhile, orders for computers were down 11 percent in January while orders for machinery fell 2.5 percent.