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Business Title: Demand for Factory Goods Rises Most in 4 Months Orders to American factories rose in November by the most in four months, showing gains in manufacturing will help the economy grow. Bookings for factory goods (TMNOCHNG) rose 1.8 percent after a revised 0.2 percent drop the prior month, data from the Commerce Department showed today in Washington. Demand for aircraft, autos and metals compensated for a drop in computers and electronics. Improving consumer spending combined with lean inventories indicate production (IPMGCHNG) will continue to increase, bolstering economic growth in early 2012. Slowing demand for capital goods like computers is a sign business investment will cool this year, reflecting concern over a slowdown in global growth and a less advantageous government tax credit. “Manufacturing is holding up fairly well,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Business investment has been very strong during this recovery, so some softening isn’t surprising.” Economists forecast (TMNOCHNG) factory orders would rise 2 percent, according to the median of 57 projections in a Bloomberg News survey. Estimates ranged from gains of 0.9 percent to 3 percent. October was previously reported as a 0.4 percent decrease. Stocks held earlier losses after the figures, with the Standard & Poor’s 500 Index declining 0.5 percent to 1,271.2 at 10:26 a.m. in New York. The yield on the benchmark 10-year Treasury note climbed to 1.96 percent from 1.95 percent late yesterday. Orders for goods meant to least at least three years increased 3.7 percent, in line with the 3.8 percent increase estimated by the government on Dec. 23. Demand for capital goods excluding aircraft and military equipment, a measure of future business investment, fell 1.2 percent, the same as previously estimated. The decrease followed a 0.9 percent decline in October. Shipments of such equipment, which are used in calculating gross domestic product, dropped 0.8 percent, marking the third consecutive decrease. Bookings for commercial aircraft, which is often volatile, jumped 74 percent after dropping 14 percent. Demand for automobiles and parts climbed 0.9 percent and demand for metals rose 4.6 percent. Orders for computers and electronic products fell 4.3 percent. Boeing Co. (BA), the largest U.S. aircraft maker, said it received 96 orders in November, up from 7 the prior month and the most since August. “2012 will be a more challenging economic environment,” David Anderson, chief financial officer at Honeywell International Inc. (HON), said on a Dec. 15 conference call. “It’s pretty clear that we’ll experience European recession. We expect emerging regions, including China, India, and the Middle East, to continue to grow low double-digits in 2012.” Bookings for non-durable goods, including petroleum and chemicals, rose 0.3 percent, today’s report showed. Inventories climbed 0.5 percent in November, indicating factories were already ramping up production to restock warehouses. Manufacturers had enough goods on hand to last 1.34 months at the current sales pace, up from 1.33 in October. Post Comment Private Reply Ignore Thread |
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