Washington, DC, Dec. 24--Orders to U.S. factories for big ticket goods fell 1.4% in November, handing a setback to the nation's manufacturers, which have been struggling to get back on their feet after being knocked down by last year's recession.
The unexpected drop in new orders for costly manufacturered goods came after a 1.7% rise in October and marked the weakest showing since September, according to the Commerce Department.
November's decline surprised economists, who were forecasting an increase in orders of around 0.8%. Manufacturing has been the weakest link in the national economy's recovery. After staging a decent comeback at the beginning of the year, factory activity has stumbled in recent months. Manufacturers continue to cut jobs.
While consumers have been carrying the economy all year, businesses' shoulders have been far less broad. Companies haven't made big capital investments and haven't been in a rush to hire because their profits haven't recovered and they face economic uncertainities, including a possible war with Iraq.
A sustained turnaround in capital investment is considered a necessary ingredient to the economy returning to full throttle, economists say.
In November, the weakness in orders for manufacturered goods was fairly widespread, although demand was especially slack for transportation products.
Orders for transportation equipment fell 1.6% in November from the previous month, representing a turnaround from October's 1.9% increase. For automobiles and parts, orders dropped by 4.5% in November, following a 3.7% advance in the previous month. Airplanes for commercial use saw orders go down by 7.7% last month, after dipping 1.7% in October.
Excluding transportation products, which can swing widely from month to month, overall orders fell 1.3% in November. Orders for primary metals, including steel, fell 4.6% in November, the biggest decline since October 2000. That came on top of a 1.2% drop recorded in October. Machinery orders declined 3.2% last month, erasing October's 2.7% increase. For computers, orders dropped 3.7% in November, after a 0.9% decline the month before. Orders for electrical equipment and appliances dipped 0.6% in November, following a 1.9% drop.
Shipments, a barometer of current demand, fell 1.3% in November, after rising 1.4% in October.
