Factory orders in the United States fell for the straight month in a row during the month of June, following weak demand for transportation equipments and capital goods; however, signs of stabilization in business spending offered some hope for struggling industries.
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German factory orders dropped in June as overseas demand especially within the eurozone went down sharply.
“[.] the IFO and PMI imply factory orders are growing about 2% year-over-year, not falling 3%”.
Core capital goods shipments, which are used to calculate business equipment spending in the gross domestic product report, fell 0.2 per cent in June.
The Commerce Department says that orders that cover business investment plans rose 0.4 per cent in June following declines of 0.6 per cent in May and 0.9 per cent in April.
Manufacturing, which accounts for about 12 per cent of the economy, has been pressured by the residual effects of a strong dollar and weak global demand, which have undermined exports of factory goods. Orders for primary metals were down, reflecting a big drop in orders for iron and steel.
“Despite the robust sentiment, industry is finding it hard to gain ground: On average, orders are this year only slightly higher than the average of 2015, and in comparison with the same month last year the level is noticeably 3 percent lower”, said Alexander Krueger of Bankhaus Lampe KG. Orders for electrical equipment, appliances and components gained 0.3 percent. Orders for computers and electronic products slumped 1.9 percent, the largest drop in more than a year.
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Inventories of nondurable goods, another category in the calculation of quarterly GDP, rose 0.2% in June. Orders for goods built to last, excluding the volatile transportation category, fell by 0.4%.
