WASHINGTON – Orders to U.S. factories rose in February, breaking a six-month losing streak.
Factory orders rose 0.2 per cent in February, which was the first increase since July, the Commerce Department reported Thursday. The climb was a welcome development for manufacturers struggling with disappointing economic growth in major trading partners like China, Europe and Japan. A stronger U.S. dollar also makes U.S. goods more expensive overseas.
However, the news for February was tempered by a revision in the January figure: orders fell 0.7 per cent, worse than the 0.2 per cent drop the government originally reported.
Excluding volatile transportation orders, factory orders rose 0.8 per cent, the most since June. Orders for autos and auto parts fell 1.2 per cent, and orders for private aircraft and aviation parts dropped 8.8 per cent.
Orders for durable goods, meant to last at least three years, fell 1.4 per cent. Nondurable goods orders rose 1.8 per cent in February, pulled up by rebounding prices for petroleum products. In another encouraging sign, orders in a category viewed as a proxy for business investment fell 1.1 per cent. That was an improvement on the 1.4 per cent drop that appeared in a separate, preliminary report last week.
Tim Quinlan, an economist with Wells Fargo Securities, said the “weakness in manufacturing has been overstated by a confluence of one-off factors” including disruptive snowstorms and the shutdown of West Coast ports in a labour dispute. Still, he wasn’t particularly impressed with the February numbers.
“I think we’re due for a stretch of better reports,” Quinlan said. “But today’s report wasn’t it.”
A trade group reported Wednesday that U.S. factories expanded last month but at a weaker pace. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index slid to 51.5 in March from 52.9 in February. It was the fifth straight drop. But any reading above 50 signals growth.
Despite months of dropping orders and slower growth, factories have added jobs for 19 straight months, the longest streak since the mid-1990s. Last year, manufacturers created 215,000 jobs, most since 1997.