WASHINGTON - Orders to U.S. factories shot up at the fastest pace in six months in June, reflecting big increases in petroleum prices and heavy demand for military equipment.
The Commerce Department reported Monday that orders rose by 1.7 percent in June, the best showing since a 1.9 percent rise in December.
The June increase was more than double the gain that economists had been expecting and was led by a 5.2 percent surge in orders for primary metals such as steel. Orders for defense capital goods soared by 16.9 percent, the second consecutive double-digit gain, reflecting heavy demand for military hardware to fight the wars in Iraq and Afghanistan.
Demand for durable goods, items expected to last at least three years, rose by 0.8 percent in June while orders for nondurable goods were up by 2.5 percent. The rise in nondurable goods was driven by big increases for refined petroleum products, reflecting the big surge in energy prices.
Orders for motor vehicles showed a 2.3 percent rise in June following declines in both April and May. Analysts do not expect the rise in auto demand to last given the struggles U.S. auto companies are facing with the weak economy and soaring energy prices.
Manufacturers have been struggling with the weak U.S. economy, which has hurt automakers and industries connected to housing particularly hard.
This weakness has been partly offset for many companies by a boom in U.S. exports, however. That's due to stronger growth overseas and a declining value of the dollar, which has made many companies more competitive in foreign markets.
Source: http://news.yahoo.com/s/ap/20080804/ap_on_bi_go_ec_fi/factory_orders;
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