Businesses boost orders for equipment, machinery
Wednesday, September 28, 2011
WASHINGTON (AP) — Companies ordered more machinery, computers and communication equipment in August, a positive sign for the slumping U.S. economy.
An increase in demand for those kind of longer-lasting factory goods suggests businesses are sticking with their investment plans, despite slow growth and weak consumer spending.
Overall orders for durable goods slipped 0.1 percent last month. The modest decline was largely due to an 8.5 percent drop in orders for autos and auto parts. In July, demand for those goods surged 10.2 percent — the biggest increase in eight years.
Economists looked past the headline figure and focused more closely on a 1.1 percent increase in a key category that measures business investment plans. Those are core capital goods that are neither used for defense nor transportation.
Another bright sign: shipments of those goods rose 2.8 percent, the fourth consecutive gain in this category.
The orders were placed and shipped in a month when the stock market fluctuated wildly, Europe’s debt crisis intensified and a raft of data suggested the U.S. economy was vulnerable to another recession.
Economists said the fact that businesses kept expanding and modernizing during the turbulent month suggests many are confident in the future.
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