January 06, 2010 |
|WASHINGTON (MarketWatch) -- In a further sign that the U.S. factory sector is emerging from recession, businesses stepped up their demand in November for capital equipment to expand production, the Commerce Department reported Tuesday.|
Factory orders increased 1.1% in November, greater than the 0.8% expected by economists surveyed by MarketWatch.
This is the seventh increase in the past eight months.
October's orders were revised higher by two-tenths of a percent to 0.8%.
The factory order report was overshadowed by a 16% plunge in pending home sales in November reported by the National Association of Realtors.
Stocks fell after the pending home-sales data were released. The Dow Jones Industrial Average was recently down 38 points to 10,548.
Orders for durable goods increased 0.2% in November, unrevised from the initial estimate released late last month. Orders for nondurable goods rose 1.8%.
Core capital equipment orders rose 3.6% in November, revised up from 2.9% estimated a week ago, the government said.
Shipments of core capital equipment, a key component of investment in the gross domestic product calculations, rose 1.1% in November.
Leading indicators released since the New Year has shown that manufacturing is cranking up around the world.
A survey of U.S. purchasing managers released Monday showed that U.S. manufacturing expanded at its fastest pace in more than three years in the final month of 2009. Read about jump in ISM index.
There were similar reports in Asia and Europe.
Shipments of factory goods rose 1.0% in November, including a 0.2% rise in durable-goods shipments. Shipments have been higher in five of the past six months but are still down 17.0% in the past year.
Inventories rose 0.2% in November for the second straight monthly gain.
Inventories had been extremely lean; the increase is a sign manufacturers want to restock shelves, economists said.
As reported a week ago, durable-goods orders were stronger than the headline suggested as overall orders were depressed by a plunge in volatile aircraft sector. Orders for civilian aircraft fell 33.3% while orders for defense planes fell 4.6%.
Excluding transportation goods, factory orders rose 1.9%. Excluding defense goods, orders rose 1.1%.
Orders for machinery rose 3.3%. Orders for electronics rose 3.1%.
Orders for nondurable goods rose 1.8% led by petroleum products.
By Greg Robb, MarketWatch