Tuesday, October 21st14.2°C
23836

Orders for US durable goods up 0.7 per cent in June led by solid gain in business investment

WASHINGTON - Orders for long-lasting manufactured goods rebounded in June after a May decline, helped by a recovery in demand in a key category that signals business investment plans.

Orders for durable goods increased 0.7 per cent in June on a seasonally adjusted basis following a 1 per cent decline in May, the Commerce Department reported Friday.

A category viewed as a proxy for business investment plans rose a solid 1.4 per cent, recovering after a revised 1.2 per cent drop in May. It was the best showing since orders in this core capital goods category rose 4.7 per cent in March.

The strength last month came from solid gains in demand for commercial aircraft and machinery. Analysts expect economic activity will strengthen in the second half of the year, helped by stronger factory production.

The 0.7 per cent overall increase was in line with economists' expectations and pushed total orders to $239.9 billion. So far this year, orders are up 3.5 per cent over the same period last year.

Analysts were encouraged by the solid rebound in June, saying it should set the stage for further growth in coming months.

"June's strong orders data and other survey evidence suggest that business investment will continue to grow at a decent rate in the second half of the year," said Paul Dales, senior U.S. economist at Capital Economics. He said he expects growth would rebound to 3.2 per cent in the April-June quarter.

Demand for transportation products rose 0.6 per cent, reflecting a big 8.2 per cent gain in orders for commercial aircraft which offset a 2.1 per cent drop in demand for motor vehicles. The drop in auto demand was expected to be temporary given strong sales of new cars this year.

Orders for machinery rose 2.4 per cent while demand for primary metals such as steel increased 0.9 per cent.

Orders for computers and related products dropped 13.9 per cent but that followed a big 11.5 per cent increase in the previous month.

The overall economy went into reverse in the January-March quarter, with output shrinking at an annual rate of 2.9 per cent. That reflected in part a severe winter that disrupted U.S. economic activity, from factory production to shopping.

Many economists believe growth rebounded to a rate around 3 per cent in the April-June quarter and they are looking for momentum to build even more in the second half of this year.

The optimism is based on a belief that the five-year-old economic recovery is finally gaining traction, with businesses confident enough to step up hiring. That uptick in hiring is expected to power stronger consumer spending and more factory production.

The government reported that factory output increased for a fifth straight month in June as manufacturers cranked out more aircraft, chemicals and furniture. For the April-June quarter, manufacturing output accelerated to the fastest pace in more than two years and economists are looking for further gains in the months ahead, reflecting strong demand for autos and increased spending by businesses on new equipment.

A surprisingly resilient jobs report for June showed that factories added 16,000 positions, the most in four months, and the average work week for manufacturing employees remained at a post-recession high.

The Institute for Supply Management reported that its closely watched manufacturing index expanded in June for a 13th straight month with broad-based growth across nearly all of the 18 sectors that the index covers.

The Canadian Press


Read more Business News

23708


Recent Trending




Today's Market
S&P TSX14547.71+209.94
S&P CDNX822.2810.93
DJIA16614.81215.14
Nasdaq4419.479+103.404
S&P 5001941.28+37.27
CDN Dollar0.8914+0.0006
Gold1248.50-3.20
Oil82.16+0.20
Lumber329.70+0.10
Natural Gas3.699-0.012

 
Okanagan Companies
Pacific Safety0.100.00
Knighthawk0.01-0.005
QHR Technologies Inc1.17+0.05
Cantex0.055-0.025
Anavex Life Sciences0.192+0.001
Metalex Ventures0.045-0.005
Russel Metals33.09+0.81
Copper Mountain Mining2.17+0.18
Colorado Resources0.150.00
ReliaBrand Inc0.012+0.0009
Sunrise Resources Ltd0.060.00
Mission Ready Services0.46+0.01

 



23021

FEATURED Property
2109648Kinncum Rd
$34,900
more details
image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_








Member of BC Press Council


22496