US factory orders, business spending on equipment soar, point to manufacturing thews

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US factory orders, business spending on equipment soar, point to manufacturing thews

On Tuesday, US Commerce Department said that new orders for US-borne goods rose more than anticipated in June and business spending on equipment bodes well, suggesting a sustenance in manufacturing strength despite a latest rotation in demands to services from goods.

In point of fact, latest upbeat data on US factory orders came forth a day after an Institute of Supply Management (ISM) survey had reported that its index for US national factory activity had been eased last month to 59.5 from 60.6 a month earlier, however, the data had also illustrated that a long-running ruckus in supply chains had begun to wane.

New orders for US-borne goods rise, business spending remains propitious

According to US Commerce Department data released earlier in the day, new factory orders for US-borne goods soared as much as 1.5 per cent in June after progressing 2.3 per cent in May, well above an analysts’ estimate of 1.0 per cent, while on an annualized basis, US factory orders grew by 18.4 per cent compared to the same time a year earlier, suggesting a solid US manufacturing landscape in a near- to intermediate-term despite a temporary lag in momentum.

Apart from that, orders for transportation equipment surged 2.0 percent, largely buoyed up by an unprecedented growth in Boeing Co., while new orders for motor vehicles dipped 0.3 per cent as a global-scale chip-shortage seems to have accelerated.

Meanwhile, expressing an out and out optimism over US factory activity, accountable for roughly 11.9 per cent of entire US economy, at least until end-2021, a chief economist at Action Economics in Boulder, Colorado, Mike Englund, said, “We expect a solid growth path for the factory data through 2021, capped by capacity constraints and supply chain problems”.