Orders to US factories declined in November for the third time in the past 4 months

WASHINGTON – Orders to U.S. factories declined in November for the third time in the past four months. A key category that tracks business investment fell as well.

Factory orders dipped 0.2 per cent in November after a 1.3 per cent increase in October, the Commerce Department said Wednesday. A closely watched category that serves as a proxy for business investment plans fell 0.3 per cent.

American manufacturers have struggled this year with a strong dollar, which has made their products pricier and less competitive overseas. In addition, economic weakness in many major export markets, from Europe to China, has hurt U.S. sales abroad.

For November, orders for long-lasting durable goods — everything from airplanes to refrigerators — were flat after a 2.8 per cent increase in October. Demand for nondurable goods, such as paper, chemicals and food, fell 0.4 per cent in November after dropping 0.2 per cent in October.

The decline of 0.3 per cent in the investment category followed a 0.6 per cent increase in October.

Demand for commercial aircraft, a volatile category, fell 22.2 per cent in November after posting a 78.8 per cent increase in October.

Orders for machinery dropped 1.4 per cent in November. Demand for primary metals such as steel fell 2.9 per cent. But orders for computers rose 3.9 per cent.

The dollar has appreciated more than 11 per cent in the past 12 months against a basket of foreign currencies, according to the Federal Reserve. As the dollar strengthens, American-made goods become more expensive for foreigners, and sales suffer.

The Institute for Supply Management reported that its index of factory activity fell below 50 in December and November. Any reading below 50 signals contraction in the manufacturing index.

Still, the broader U.S. economy has withstood the challenges confronting factories. Orders for motor vehicles and electronics have been solid, in large part because of steady demand from domestic consumers. Unemployment has dipped to 5 per cent — a rate associated with normal economies — and Americans have bought more cars and restaurant meals.