The US factory orders dropped in October, but at a slower than expected pace. This brings some peace of mind to the state of the industry, which generates about 12% of US gross domestic product (GDP). The statistics show that the fall is within 0.1% and expectations were for a fall of 0.4%.
October’s small decline in factory orders reflected an 18.5% drop in demand for civilian aircraft and a 7.6% drop in demand for defense aircraft. Excluding the volatile aircraft category, orders for non-defense capital goods — a measure of business spending plans — rose 0.3% in October.
So-called core capital goods orders surged 2.3% in September. The Commerce Department initially estimated a 0.5% decline in October.
The orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, rose 0.3% in October instead of the 0.5% drop reported last month.
In addition, September data are revised upwards: from 1.4 to 1.7% growth.
These data remain consistent with a solid upswing in manufacturing activity and an acceleration in corporate capital spending. Excluding the transport sector, factory orders grew by 0.8% in October versus 1.1% in September.
Despite the small drop in October, US manufacturers are growing rapidly. Orders are up 5.6% through the first 10 months of 2017 compared to the same period a year earlier. factory shipments, meanwhile, rose 0.4% to mark the fifth gain in six months.