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New orders for factory goods rose in April, but not enough to reverse the prior month's plunge, adding to signs of a slowdown in manufacturing activity.
The US Commerce Department on Wednesday said new orders for manufactured goods increased one per cent. March's orders were revised to show a 4.7-per cent decline instead of the previously reported 4.9 per cent tumble. Economists polled by Reuters had forecast orders received by factories rising 1.5 per cent.
Manufacturing has been hit by a combination of deep government spending cuts and slowing global demand, especially in China and the recession-hit Europe.
Data on Monday showed a gauge of national factory activity contracted in May for the first time in six months, dragged down by declining orders.
This suggests the weakness in factory activity, also highlighted by a drop in industrial production in April, will probably persist for some time.
The Commerce Department report showed factory orders were lifted by an 8.4 per cent jump in transportation equipment on the back of strong orders for automobiles, and civilian and defence aircraft.
Orders excluding the volatile transportation category slipped 0.1 per cent after falling 2.8 per cent in March.
Outside transportation there were gains in orders for machinery, computer and electronic products, primary metals and electrical equipment, appliances and components.
Unfilled orders for manufactured goods rose 0.3 per cent and were up 0.8 per cent excluding aircraft, a positive sign for factories.
Shipments fell for second straight month.
Stocks of unsold factory goods edged up 0.2 per cent, showing no sign inventories are piling up, which should help the sector in the long-run. Factory inventories account for more than a third of business inventories.
The inventories-to-shipments ratio was 1.31, the highest since June 2012, and up from 1.30 in March. The unfilled orders-to-shipments ratio increased to 6.26 from 6.21.
The Commerce Department also said orders for durable goods, manufactured products expected to last three years or more, rose 3.5 per cent instead of the 3.3 per cent increase reported last week.
Durable goods orders excluding transportation were up 1.5 per cent rather than 1.3 per cent.
Orders for non-defence capital goods excluding aircraft - seen as a measure of business confidence and spending plans - increased 1.2 per cent as previously reported.
Separate data showed labour-related costs fell in the first quarter by the most in four years, although the reading appeared to be distorted by a shift in employee compensation during the prior period to avoid a tax hike.
Unit labour costs fell at a 4.3 per cent annual rate during the period, revised readings from the US Labor Department showed. The government had initially estimated a 0.5 per cent gain, and the downward revision confounded analysts' expectations that the reading would remain unrevised.
