Institute for Supply Management reported its manufacturing index hit 59 in October, up from 56.6 in September
WASHINGTON—Orders to U.S. factories declined in September, dragged by falling demand in the volatile aircraft category.
The Commerce Department said November 4 that orders retreated 0.6 percent in September, after having plunged 10 percent in August, also due largely to plummeting demand for aircraft.
There are usually dramatic monthly swings in demand for aircraft, which before falling in September and August had soared by 315.6 percent in July. Excluding the volatile transportation sector, factory orders have been flat for the past two months.
Orders at aluminum, iron and steel mills rose in September, as did demand for furniture and motor vehicles. But those gains were offset, in part, by declining orders for construction machinery, electronics products and consumer goods.
Despite the decrease in orders, other manufacturing indicators point toward strengthening factories.
The Institute for Supply Management, a trade group of purchasing managers, reported that its manufacturing index climbed to 59 in October from 56.6 in September. Any reading above 50 signals expansion. The gains match a three-year high previously reached in August and marks a solid rebound from a September decline.
The survey behind the index showed that orders, productivity and hiring each improved at a faster clip in October than the prior month.
Separately, the Federal Reserve reported last month that U.S. manufacturing output rose in September. Factory production rose 0.5 percent in September after falling 0.5 percent in August.
Furniture-making increased 2.4 percent in September, while aerospace products climbed 1.7 percent. Production of clothing, chemicals and computers also improved.
Factories have added 161,000 jobs over the past 12 months. The job gains have helped a solid streak of hiring that has pushed the unemployment rate down to 5.9 percent from 7.2 percent a year ago.
Stronger domestic demand for manufactured goods has offset what appears to be less demand from China and Europe, where an economic slowdown has caused the dollar to rise and make American-made products more expensive for foreign buyers.