New orders for U.S.-made goods increased for a fourth straight month in March and orders for capital equipment were stronger than previously reported, pointing to a sustained recovery in the manufacturing sector.
Factory goods orders rose 0.2%, the Commerce Department said May 4 after an upwardly revised 1.2% increase in February. Economists polled by Reuters had forecast factory orders gaining 0.4% in March after a previously reported 1.0% increase in February.
Factory orders were up 5.2% from a year ago.
Manufacturing, which accounts for about 12% of the U.S. economy, is recovering in part as steadily rising oil prices reinvigorate the energy sector, leading to demand for machinery and other equipment.
The government reported last week that spending on mining exploration, wells and shafts surged at a record 449% rate in the first quarter.
The May 4 report from the Commerce Department also showed orders for nondefense capital goods excluding aircraft — seen as a measure of business confidence and spending plans — increased 0.5% instead of the 0.2% gain reported last month.
Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, rose 0.5%, instead of the 0.4% reported last month.
In March, orders for machinery increased 0.3%. Orders for electrical equipment, appliances and components jumped 1.2%, while orders for primary metals rose 0.4%.
Orders for transportation equipment increased 2.6%, reflecting a 31.0% surge in defense aircraft orders.
Motor vehicle orders fell 1.7%, the biggest drop since August 2014. Orders for computers and electronic products fell 0.8% in March.
Unfilled orders at factories increased 0.3%, rising for a second straight month. Manufacturing inventories were unchanged after rising for five straight months.
The inventories-to-shipments ratio rose to 1.32 from 1.31 in February.