Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 4, 1994 TAG: 9403040153
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
SOURCE:
DATELINE: WASHINGTON LENGTH: Medium
The Commerce Department said Thursday that orders rose 2.1 percent as the year began, following a revised 1.4 percent gain in December.
The string of advances is the longest since one that ran from September 1987 to June 1988.
But the rise was caused by highly volatile orders for aircraft and parts, and economists said it is unlikely manufacturing sales will continue to grow at the same pace.
Laurence Meyer, a private economist in St. Louis, said the higher factory orders were in line with predictions for 3.5 percent overall economic growth in the first quarter.
"The last time transportation orders increased that much was in June, and they were down by more the next month," he said.
Transportation orders rose 14 percent, or $5 billion, to a total of $40.7 billion. Manufacturing orders excluding transportation increased 0.3 percent; excluding defense orders, they rose 1.6 percent.
The surge in transportation orders could continue for a while, because Saudi Arabia has agreed to buy 50 jetliners from U.S. companies for $5 billion. The purchase is not included in the January order figures.
Rising orders can mean more jobs and increased production to meet demand. The Commerce Department also reported that unfilled orders increased for the first time in nearly a year, an indication demand is outpacing supply and more hiring may be on the way.
The Commerce Department said factory orders totaled a seasonally adjusted $272 billion, up from $266.4 billion in December. Orders have risen every month since a 1.9 percent decline in July.
Manufacturing, which languished early in 1993, showed particular strength in the final quarter, when the economy expanded at a 7.5 percent annual rate.
Orders for durable goods rose 3.7 percent, unchanged from a preliminary report last week. The seasonally adjusted total of $147.7 billion was up $5.2 billion from December and was the sixth consecutive monthly increase in orders for big-ticket items expected to last at least three years.
Orders for non-durable goods, such as food and fuel, increased 0.4 percent to a seasonally adjusted $124.3 billion, the fourth rise in the past five months.
Unfilled orders were up 0.6 percent, the first rise since February 1993. The orders backlog is generally seen as a measure of whether facilities and manpower are able to keep up with demand.
With extreme weather in much of the nation, shipments slipped 0.1 percent after five straight increases. Shipments were down to $269.3 billion after a 1.6 percent increase in December 1993.
Inventories increased 0.3 percent, the first rise since July.
Also, the U.S. Chamber of Commerce said its Business Confidence Index dropped a bit in February, suggesting slower economic growth. The survey dipped from 54.3 in December to 51 last month. The index seeks to measure optimism on the economy, business sales and employment prospects over the next six months.
by CNB