US Factory Orders Slide

08 January 2004

Hopes of a sustained recovery in US manufacturing have been hit by a fall in factory orders for November.

According to latest figures from the Commerce Department, orders for the month slipped 1.4% to $336.9 billion (€265.9bn; £185.7bn), the biggest drop since April. The decline follows two months of gains, including a revised 2.4% lift in October.

Orders for computers and electronics saw one of the biggest falls in November, with demand down 10.7% -- the biggest fall since July 2000. Total orders for durable goods (products designed to last more than three years) were down 2.5%, though this is less severe than earlier estimates of a 3.1% drop.

The consumer sector, however, held up well, with demand for consumer goods slipping just 0.2% in November.

• Separately, there was also disappointing news for America's service sector. The non-manufacturing index of the Institute for Supply Management recorded a surprise drop from 60.1 in November to 58.6 in December. Although this is above the 50.0 boundary between expansion and contraction, it is well below the 60.5 expected by economists.

Last week, the ISM announced that its index of manufacturing activity climbed to 66.2, its highest for over twenty years.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff