US factory orders rebounded in December, led by demand for defense equipment, furniture and appliances. The increase suggests manufacturing will continue to expand and accelerate the economy's growth.
Orders rose 0.4 percent to US$320.6 billion, following a 0.8 percent drop in November, the Commerce Department said.
Orders for defense hardware surged 16.6 percent.
Manufacturing in January began to reflect the rise in orders, expanding for a third straight month, an industry report showed on Monday.
With inventories low relative to sales, factories may need to ratchet up production even more to make sure retailers have enough goods on hand.
"Manufacturing is in the process of strengthening," said John Ryding, chief market economist at Bear Stearns & Co in New York.
"I think production will expand in the first quarter," Ryding said.
Economists had expected December orders to rise 0.3 percent to US$320.2 billion, based on the median of 64 forecasts in a Bloom-berg News survey. Manufacturing accounts for about a seventh of the US economy.
For all of last year, US factory orders fell 0.8 percent, after dropping 7.4 percent in 2001.
Some economists are cautioning against pinning too much hope on the orders number, a volatile measure that dropped as much as 2.5 percent and increased as much as 4.4 percent a month last year.
While defense and consumer demand helped boost orders, corporate spending remains weak, said Tim Rogers, chief economist at Briefing.com in Boston.
"We're still waiting for businesses to join in," he said.
Business investment will pick up later this year, some economists said.
"Capital equipment today has a shorter lifespan than ever before and the longer you go with capital spending at low levels, the greater the eventual need for replacement spending," said Lou Crandall, chief economist at Wrightson ICAP in New York, before the industry report was released.
Economic growth is expected to rise to a 2.7 percent annual rate this quarter from a 0.7 percent annual growth rate in the last three months of 2002, according to the latest consensus estimate by the Blue Chip Economic Indicators.
Orders for non-defense capital goods excluding aircraft fell 0.3 percent in December after falling 3 percent the previous month.
Non-defense orders have declined four of the last five months.
Shipments of such goods, which economists consider a proxy for current business investment in computers and software, fell 1.3 percent following a 1.4 percent decrease in November.
In addition to the surge in defense equipment, the December rise was led by an 11 percent rise in appliance orders and a 3 percent rise in furniture orders.
Clothing orders gained 1.8 percent, while orders for petroleum products rose 6.5 percent.
Orders for all non-durable goods, which include industrial chemicals, drugs, papers and textiles, rose 1.1 percent in Decem-ber after falling 0.4 percent the month before.
New orders for durable goods, which account for more than half of the factory report, fell 0.2 percent in December, reflecting a drop in automobiles and metalworking machinery.
The decrease in durable goods orders compared with a previously reported gain of 0.2 percent.
Computer orders increased 25.3 percent.
Meanwhile, commercial aircraft orders jumped by 22.2 percent in December.
Bookings for electrical equipment, appliances and components rose 0.4 percent.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
RSS