Greater demand for airplanes pushes U.S. factory orders higher

A big jump in demand for commercial aircraft pushed orders to American factories up in September after two months of declines – but businesses still cut back sharply on orders for machinery and other goods, in a move that may signal fears of slow economic growth.

According to the United States Commerce Department, factory orders increased 1.7 per cent in September from August; that followed a 0.1 per cent decline in August and a 2.8 per cent fall in July.

The September gain was driven by a 57.7 per cent jump in demand for aircraft, the Commerce Department said. The big rise in demand for aircraft helped offset a 0.7 per cent dip in demand for autos and auto parts – but that decline is expected to be temporary given the strength in auto sales this year.

But so-called core capital goods, which include machinery and electronics, fell 1.3 per cent in September, the agency said, caused by a 23.6 per cent drop in machinery demand, with big declines in construction machinery, electric turbines and generators.

The decline was the second in three months and points to weaker activity at factories in the July-September quarter.