Orders to U.S. factories surged in March by the largest amount in a year, an encouraging sign that the recent slowdown in manufacturing may be ending.
The Commerce Department said Wednesday that total factory orders rose by 3.1 percent in March, pushed higher by a big jump in demand for commercial aircraft and the biggest rise in the category that tracks business investment in new equipment in 2 1/2 years.
The increase was far better than the 2 percent figure that analysts had been expecting and offered hope that manufacturers were beginning to experience rising demand after a recent weak period brought on by troubles in housing and auto sales.
The good news on factory orders followed a report from the Institute for Supply Management that its closely watched gauge of manufacturing activity rose to 54.7 in April, the best showing in 11 months.
The index had dipped below 50 in November and January, indicating the manufacturing sector was contracting, as companies trimmed inventories to cope with the serious slump in housing and an overhang of unsold autos.
The improving data has prompted some economists to say that the worst of the manufacturing slump may be ending.
On Wall Street, investors were encouraged by the factory report. The Dow Jones industrial average rose 75.74 points to close at 13,211.88, its second straight record close and 16th this year.
For March, the government said that orders for big-ticket durable goods rose by 3.7 percent, even better than a preliminary report last week which had put the increase at 3.4 percent.
Orders for nondurable goods, items like petroleum and chemicals, rose by 2.3 percent, the biggest gain since January 2006, the AP reports.
A separate report today showed job cuts announced by U.S. employers increased last month from a year earlier, led by financial institutions including Citigroup Inc. and mortgage lenders. Announced cuts rose 18 percent to 70,672, the most in two months, said Chicago-based Challenger, Gray & Christmas Inc.
Economists forecast a government report on May 4 will show the U.S. added 100,000 jobs in April, the lowest monthly total in more than two years.
Unfilled orders rose 1.8 percent after a 1.1 percent gain.
Orders for durable goods, which make up about 55 percent of factory demand, rose a revised 3.7 percent after a 2.3 percent increase in February. The government last month reported a 3.4 percent rise in durables orders for March
Demand for capital goods excluding aircraft and military equipment, a measure of future business investment, increased 4.8 percent after a decline of 2.4 percent. The Commerce Department had previously estimated a 4.7 percent gain. Shipments of these goods, which are used by the government in its calculation of gross domestic product, rose 0.6 percent after declining 0.1 percent.
Civilian aircraft orders rose 38.1 percent after more than doubling in February. Boeing Co., the world's second-biggest commercial airplane maker, received orders for 119 aircraft in March, up from 57 a month earlier, according to company data.
Bookings for machinery rose 4.7 percent, after rising 1.0 percent, today's report said. Primary metals orders rose 3 percent after declining 3.9 percent.
Orders for computers and electronic products rose 0.4 percent after increasing 3.6 percent. Bookings for automobiles rose 3.8 percent after a 0.2 percent gain.
Bookings for non-durable goods, including food, petroleum and chemicals, rose 2.3 percent in March after increasing 0.5 percent. The rise partly reflects an increase energy prices.
Crude oil futures on the New York Mercantile Exchange rose to a six-month high $66.03 a barrel in March.
Today's figures follow other reports showing an improved outlook for manufacturing.
Spending on equipment and software rose at a 1.9 percent annual rate in the first quarter, after a 4.8 percent rate of decline in the final three months of 2006 that was the biggest in four years, according to the Commerce Department, Bloomberg reports.
Prepared by Alexander Timoshik
The Federation Council may gather for the meeting on October 4 to consider new laws on the accession of new territories to Russia after the referenda