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Associated Press
A line worker helps build a Chrysler 200. Factory orders rose 10.5 percent in July, the biggest one-month jump since 1992.

US factory orders surge record 10.5% in July

WASHINGTON – Business orders for U.S. factory goods shot up by a record amount in July, reflecting a surge in demand in the volatile category of commercial aircraft.

But outside of transportation, orders actually fell slightly during the month, although the setback was expected to be temporary.

Factory orders rose 10.5 percent in July, the biggest one-month increase on records dating to 1992, the Commerce Department reported Wednesday. Orders for civilian jetliners rose four-fold. Excluding transportation, orders edged down 0.8 percent and a key category that serves as a proxy for business investment plans fell 0.7 percent.

Manufacturing has been a source of strength this year, helped by robust demand for new cars, other consumer items and business equipment. Economists expect that strength to continue.

The report found that durable goods, items expected to last at least three years, rose 22.6 percent in July, unchanged from the estimate in a preliminary report last week. Orders for nondurable goods such as paper, chemicals and food, were down 0.9 percent in July after a 0.4 percent increase in June.

In addition to the surge in demand for airplanes, orders for motor vehicles and parts rose 7.3 percent. But there was slippage in other areas. Orders for primary metals such as steel fell 0.3 percent, demand for machinery was down 1.2 percent and orders for computers and other electronics products fell 14.7 percent.

Despite this weakness, most economists expect that manufacturing production will provide solid support for economic growth in the second half of this year.

While a key category viewed as a proxy for business investment plans dropped 0.5 percent in July, the dip followed a sizable 5.4 percent increase in June. The government reported last month that investment by businesses in new equipment grew at a solid 10.7 percent annual rate in the April-June period, erasing a decline in the first three months of the year.

Factory output rose for a sixth consecutive month in July, increasing 1 percent.

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