WASHINGTON - Orders for manufactured goods posted a surprisingly strong increase in April as demand rose across a number of industries.
The Commerce Department reported Tuesday that orders were up 1.1 percent in April following a 1.5 percent increase in March. Orders had fallen in January and March as a spreading slowdown in the overall economy depressed activity in manufacturing.
The April increase came as a surprise. Analysts had been forecasting a small decline.
Orders in the battered auto industry and in the volatile commercial aircraft sector did fall sharply but other areas showed strength from rising demand for iron and steel to increased orders for appliances and heavy machinery. Demand for petroleum was also up sharply, reflecting surging oil prices.
The better-than-expected reading on orders for manufactured goods followed news Monday that a key gauge of manufacturing rose to a reading of 49.6 in May, up from 48.6 in April. While the Institute for Supply Management manufacturing gauge remained at levels indicating a continued contraction in manufacturing, the upward movement was seen as a possible sign that manufacturing was beginning to pull out of its earlier slump.
At the moment, manufacturing is being buffeted by a prolonged slump in housing, which has cut into demand for building supplies, and soaring energy prices, which have hurt auto sales. However, these adverse factors are being offset by continued strong demand for U.S. exports, which are being helped by the weaker dollar which makes U.S. products more competitive on overseas markets.
For April, demand for durable goods, items expected to last at least three years, fell by 0.6 percent, with that weakness led by a 24.4 percent drop in demand for commercial aircraft and a 4.2 percent decline in motor vehicles.
However, orders for non-durable goods rose by 2.8 percent, led by a big jump in demand for petroleum products, reflecting higher prices. Demand for food and beverages also was up sharply.
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