WASHINGTON (AP) – Orders to U.S. factories for big-ticket manufactured goods posted a sizable gain in June, but the advance was fueled by higher demand for commercial aircraft. Outside of this volatile category, a key category that represents business investment rose by a far more modest amount.
Orders for durable goods jumped 3.4 percent in June from May, when orders had fallen 2.1 percent, the Commerce Department reported Monday. The gain was the best result since March. However, the jump was driven by aircraft orders booked by Boeing at the Paris air show.
A category viewed as a proxy for business investment plans rose a slower 0.9 percent. While this was the strongest showing since March, it followed two months of declines. Through the first six months of this year, demand in the investment category is running 3.4 percent below the same period a year ago.
This category has been weak for months and has dragged activity in the overall manufacturing sector. Total orders for durable goods, items expected to last at least three years, are running 2 percent lower through the first half of this year compared to the first six months of 2014.
U.S. manufacturers have struggled this year from the effects of a strong dollar and a plunge in energy prices. The higher value of the dollar against foreign currencies makes U.S. goods more expensive and less competitive in major export markets, while the lower oil prices have led energy companies to scale back investment plans.