
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 6, 1991                   TAG: 9103060065
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FACTORY ORDERS DOWN FOR THIRD STRAIGHT MONTH/ BUT ECONOMICS SEE SIGNS OF

Factory orders for manufactured goods dropped 1.7 percent in January, their third-straight decline, the government said Tuesday. But analysts said they see signs of improvement by summer.

"We should start seeing some rebound late in the second quarter," said economist Evelina Tainer of the First National Bank of Chicago.

But the Commerce Department report showed that America's manufacturing sector remained mired in the recession in midwinter, with orders for both durable and non-durable goods dropping to a seasonally adjusted $230.6 billion in January.

Because factory orders are a gauge of manufacturing industry plans for production, a decrease often forecasts a slump in that sector and future layoffs.

In fact, the Labor Department reported earlier that factory payrolls fell by 69,000 in January, bringing manufacturing job losses since January 1989 to 900,000.

Tainer noted that orders for non-defense capital goods, excluding aircraft, rose 3.1 percent in January, to $30.7 billion, following a 1.5 percent gain in December.

"It goes along with our view of a recovery," she said.

The revised decline in orders for durable goods - items such as cars and computers expected to last more than three years - was twice as steep as first reported last week.

Durable-goods orders actually were down 1.8 percent, to $117.8 billion, rather than 0.7 percent decline as originally reported.

Transportation equipment orders fell 3.9 percent to $30.6 billion following a 13.2 percent gain a month earlier. A large drop in aircraft orders more than offset an increase in motor vehicles. Excluding the transportation category, orders fell 1.4 percent.

Defense orders dropped 9.7 percent to $7.2 billion following a huge 51.6 percent gain in December during the Persian Gulf military buildup. Excluding the defense category, orders fell 1.4 percent.

Orders for non-durable goods fell for the fourth-straight month, a 1.7 percent drop to $112.8 billion. They fell 3.9 percent in December.

Commerce reported large declines in food and petroleum products, but analysts attributed much of the drop in petroleum to prices rather than volume.

by CNB