Washington, DC, May 4--Orders to U.S. factories eked out a tiny 0.1 percent increase in March even though demand for big-ticket items took a big plunge, the Commerce Department reported Tuesday.
The small gain pushed total factory orders to $378.2 billion in March and followed a 0.5 percent decline in February. The tiny increase was still better than economists had been expecting. They were looking for a big drop of around 1.2 percent, based on a preliminary report last week that showed a huge plunge in orders for durable goods, which make up a little more than half of total factory orders.
Some of the weakness in durable goods orders was revised away, however, to show a March decline of 2.3 percent instead of the initially reported 2.8 percent drop. It was still the biggest decline in this category in 11 months. A variety of economic reports has shown that the economy slowed significantly during March as a big jump in energy prices jolted consumer and business confidence.
The small 0.1 percent increase in total factory orders reflected a 2.3 percent drop in durable goods orders, which fell to $195.1 billion, and a 2.8 percent increase in orders for nondurable goods, items not expected to last at least three years. Orders for nondurable goods rose to $183.1 billion after a 1 percent drop in February.
The government does not break down the components of nondurable goods orders. But shipments of nondurable goods for March, which closely track the movements in orders, showed a big jump in shipments of petroleum products for the month. They climbed 19.8 percent following a 0.2 percent dip in shipments from petroleum refineries in February.
For durable goods, the weakness was led by transportation equipment, which has been down for four straight months. The March drop in this category was 7.3 percent, reflecting big declines of 22.7 percent in demand for commercial aircraft and a drop of 18.9 percent in demand for military aircraft. Orders for new cars and parts fell by 2.9 percent in March.
