Article by fxtimes.com
US factory orders declined unexpectedly in January, falling for a sixth consecutive month, underscoring firms’ reluctance to invest in new business equipment amid a volatile global economy.
New orders for factory goods declined 0.2 percent in January following December’s 3.5 percent plunge that was also the biggest in nearly two years, the Commerce Department reported on Thursday. A median estimate of economists forecast a gain of 0.2 percent in January.
Excluding transportation equipment, new orders fell 1.8 percent.
Orders for non-defense capital goods excluding aircraft – a proxy for business investment – rose 0.5 percent in January instead of 0.6 percent reported last month.
Shipments of non-defense capital goods excluding aircraft, which is used to calculate gross domestic product, were revised up to reflect a 0.1 percent gain instead of a 0.3 percent drop.
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Manufacturing activity has waned over the last six months, hurt by volatile global markets and the near-halving of oil prices since June. This has caused energy companies to either delay or scrap all together capital expenditure plans.
On Monday the Institute for Supply Management said manufacturing activity slowed in February to its lowest level in more than a year, as new export orders contracted for the first time in more than two years. ISM’s manufacturing PMI fell to 52.9 in February from 53.5 in January.
Article by fxtimes.com
