A US car factory

US factory orders fell for a second consecutive month due to a decline in demand for civilian aircraft, with indications that first-quarter business spending on equipment remained weak.

The Commerce Department reported on Tuesday that factory orders fell 0.7% following a 2.1% decline in January. The economists surveyed by Reuters anticipated a 0.5% decline in orders. In February, orders increased 3.0% on an annual basis.

As a result of the Federal Reserve’s efforts to combat high inflation, rising interest rates have dampened demand for products that are typically purchased on credit. As a result of the recent failure of two regional banks, which strained the financial sector, there may be pressure on demand.

The Institute for Supply Management reported on Monday that its manufacturing PMI fell to its lowest level since May of 2020 in March. Since 2009, all subcomponents of the PMI have fallen below the 50 threshold.

After falling 14.0% in January, orders for transportation equipment fell 2.8% in February. Orders for motor vehicles increased by 0.8%, but appointments for civilian aircraft fell by 6.6%. The decline in orders for machinery was 0.6%, while orders for computers and electronic products increased 0.1%. The number of orders for electrical equipment, appliances, and components rose by 0.7%.

After rising 0.3% in January, shipments of manufactured commodities fell 0.5% in February. The factory inventory of manufactured products fell 0.1% for the second consecutive month. Compared to the prior month, the rate of unfulfilled factory orders decreased 0.1%.

In addition, the Commerce Department reported that orders for non-defense capital goods, excluding aircraft, which are viewed as an indicator of business spending intentions on equipment, decreased 0.1% in February instead of increasing 0.2% as previously reported.

By admin