Wednesday, March 07, 2001
Factory orders fall in sign of slowdown
The Associated Press
WASHINGTON A sharp drop in demand for airplanes, cars and other transportation products drove down orders to U.S. factories to their lowest point in 14 months, providing more evidence of an economic slowdown.
The Commerce Department, in its latest snapshot of manufacturing activity, reported Tuesday that all factory orders fell by 3.8 percent in January, after a 0.6 percent rise the month before.
Federal Reserve Chairman Alan Greenspan has blamed much of the economy's weakness on an effort by businesses to cut back quickly on production in the face of falling sales.
Tuesday's report is a troubling indicator that manufacturing continues having difficulty working off inventories, National Association of Manufacturers economist Gordon Richards said.
January's decline left orders at a seasonally adjusted $366.5 billion, the lowest since November 1999.
Orders for transportation equipment plunged 23.8 percent in January, reflecting widespread weakness. That followed a 12.4 percent gain in December.
Excluding the volatile transportation category, orders fell 0.3 percent, the third decrease in four months.
Orders for electronics and electrical equipment, including household appliances and communications equipment, declined by 6.3 percent on top of a 0.9 percent drop in December.
Although manufacturers have been bearing the brunt of the slowdown, there was a bright spot in Tuesday's report. Industrial machinery orders, including those for computers and machine tools, rose 5.3 percent in January, the largest increase in a year, after a 3.2 percent decline in December.
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