New orders received by U.S. factories were flat in November, missing expectations as demand for aircraft sank sharply, although a gauge of business spending plans still gave a positive sign for the economy.
The Commerce Department on Friday said orders for factory goods were unchanged after gaining 0.8 per cent in October. Analysts polled by Reuters had expected a 0.4 per cent increase in November.
Manufacturing, the pillar of the recovery from the 2007-09 recession, has lost momentum in recent months as fears of the “fiscal cliff” and slowing global demand slammed the economy.
However, there was little sign in the factory report that worries over planned austerity measures were leading businesses to cut back on investment plans.
Orders for non-defense capital goods excluding aircraft – seen as a measure of business confidence and spending plans – increased 2.6 per cent in November, a slight downward revision from an initial estimate released last month but still a healthy gain.
November’s factory orders suggested that manufacturing was not heading for a hard landing, even though factories are struggling to regain momentum.
The Institute for Supply Management said on Wednesday its index of national manufacturing pointed to a return to growth in December after factory activity contracted in November.
Weighing on overall factory orders, orders for transportation equipment, a volatile category, fell 1 per cent in November on weak civilian and defense aircraft. Orders for motor vehicles and parts rose 2.8 per cent.
Factory goods orders excluding transportation rose 0.2 per cent.