WASHINGTON (AP) – Orders to U.S. factories increased in June, and a key category that reflects business investment plans posted a modest rise. But the gains weren’t robust enough to suggest that the sluggish manufacturing sector is mounting a significant turnaround.
Factory orders advanced 1.8 percent in the month, the Commerce Department reported Tuesday. The jump, however, was fueled by a surge in demand for commercial aircraft, a volatile sector that can swing widely from month to month.
Meanwhile, a key category that serves as a proxy for business investment plans edged up 0.7 percent after declines in April and June. For the first half of the year, this category is down 3.5 percent from the same period a year ago and has dragged overall economic growth.
Manufacturing has been held back this year by a rising dollar and falling oil prices. The higher value of the dollar against foreign currencies makes U.S. goods more expensive and less competitive in major export markets. The lower oil prices have led energy companies to scale back their investment plans.
The government reported last week that the overall economy as measured by the gross domestic product grew at a 2.3 percent annual rate in the April-June quarter, an improvement from a slight 0.6 percent GDP increase in the first quarter. The rebound was powered by consumer spending.