EmailFactory orders declined 0.8% in June after increasing 0.6% in May. The Briefing.com consensus expected factory orders to decline 1.0%.
While the manufacturing sector looks fragile on the surface , the drop in orders was due entirely to weak demand from the transportation sector. Motor vehicle orders -- which are still suffering from parts shortages from Japan -- fell 2.7% in June. Defense and nondefense aircraft orders fell 25.9%. Both of these sectors should gain strength over the coming months.
Excluding transportation, manufacturing orders edged up 0.1%. The rate of increase is still softer than what we would like, yet it still reflects continued positive demand growth in the manufacturing industry in the wake of an overall weakening in the economic data.
Durable goods orders were revised up to -1.9% in June from -2.1% in the advance release. Durable orders increased 2.0% in May.
Nondurable goods orders were flat in June.
The revision to nondefense business capital excluding aircraft showed a slight gain in demand for business investment goods in June. Business capital orders increased 0.4% in June, up from -0.4% in the advance release. Shipments, which factor into GDP, were revised slightly higher from 1.0% to 1.1%.
