New Orders Jump 1.2%, Highest Rate in a Year

WASHINGTON â€”  New orders to U.S. factories rose briskly in April as goods ranging from airplanes to processed food were churned out at the fastest rate in a year, the government said Wednesday.

The value of new orders for all kinds of manufactured goods rose 1.2% to a seasonally adjusted $323.9 billion after a revised 1.3% decline in March, the Commerce Department said.

Analysts said the report added to the impression of strength in the industrial sector after the first-quarter surge in economic growth.

“What it is telling us is that the momentum in the manufacturing sector is a lot stronger than it was expected to be at this point,� said economist Anthony Chan of Banc One Investment Advisors Corp. in Columbus, Ohio.

But there were signs a slowdown could develop: Order backlogs rose 0.3% in both March and April--the first back-to-back monthly increases since mid-1995. And orders for non-defense capital goods, a measure of business’ expansion plans, fell 2% after a 3% plunge in March.

The pickup in April orders was the third rise in the last four months. Shipments also rose 1.2%, the fourth consecutive increase after a 0.1% March gain.

Commerce Department officials said it was the strongest monthly pickup in shipments in a year, since a 2.4% increase in April 1996.

Consumer demand was strong in the first quarter this year, when the economy grew at a brisk 5.8% annual rate, so some businesses may have been replenishing their depleted inventories.

“Manufacturers entered the second quarter on a high after benefiting from the surge in demand during the first quarter,� said Joel Naroff of First Union Corp.

“But spending has been a disappointment, and it is possible that factories overproduced early in this quarter,� he said.

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Factory Orders

New orders, in billions of dollars, seasonally adjusted:

April: $323.9

Source Commerce Department