U.S. economists hopeful as factory orders rise to 1.1% in March

WASHINGTON D.C.: After sliding 0.5 percent in February, new factory orders for US-made goods rebounded 1.1 percent in March, as the White House pandemic relief package and the expansion of the vaccine program to all adult Americans helped lift domestic demand.

The recovery was lower than the 1.3 percent growth estimated by economists polled by Reuters. Year-on-year, new orders for U.S.-made goods recorded an increase of 6.6 percent, the news agency reported.

According to the US Commerce Department, factory goods orders in March were lifted by robust demand for machinery, motor vehicles, fabricated and primary metal products. However, orders for electrical equipment, appliances and components registered a decline.

Unfilled orders at factories rose 0.4 percent in March, after climbing 0.9 percent in February.

Meanwhile, orders for non-defense capital goods, excluding aircraft, a closely watched indicator for business spending plans on equipment, swelled 1.2 percent in March, instead of the 0.9 percent estimated earlier.

Shipments of core capital goods, which are used to compute business equipment spending in the GDP (gross domestic product) report, rose 1.6 percent, instead of the 1.3 percent reported earlier.

Business spending on equipment showed a double-digit growth for the third straight quarter in the quarter ended March.

In the near term, however, bottlenecks in the supply chain could retard recovery in factory orders.

According to the Institute for Supply Management, shortages of inputs slowed the growth of manufacturing activity in April, even as GDP growth reached a 6.4 percent annualized rate in the first quarter, on account of robust consumer spending. In comparison, GDP grew 4.3 percent in October-December, 2020.

Economists have forecast double-digit GDP growth in the second quarter, which could help boost economic growth to 7 percent, its fastest pace since 1984.