- The Washington Times - Wednesday, March 24, 2004

ASSOCIATED PRESS

Factories saw demand for big-ticket goods rebound in February, good news for the country’s economic health and for manufacturers who have struggled to get their piece of the business recovery.

The Commerce Department reported yesterday that orders for durable goods — costly manufactured products that are expected to last at least three years — rose by 2.5 percent last month. That was a marked improvement from the 2.7 percent drop registered in January and represented the largest increase since October.

February’s performance was better than economists were expecting. They were calling for a 1.2 percent rise in durable-goods orders.

In other economic news, sales of new homes also bounced back in February, rising by a strong 5.8 percent, the department said in a second report. The increase — the largest since June — came after home sales declined by 1.1 percent in January as bad weather kept house hunters indoors.

Powered by low mortgage rates, home sales reached record highs in 2003 and are expected to be brisk this year as well.

The rebound in durable-goods orders in February was led by stronger demand for transportation equipment, including cars and airplanes. Orders for those goods jumped by 9.9 percent in February, compared with a 10.5 percent decline in January. Last month’s rise was the largest since July 2002.

David Huether, chief economist at the National Association of Manufacturers, said the report shows that “the manufacturing sector is continuing to gain ground and emerge from its three-year-long slump.”

Orders for computers, communications equipment, machinery and primary metals, which includes steel, all posted gains in February. But orders for fabricated metals and electrical equipment and appliances declined.

Still, Mr. Huether said he was especially heartened that orders for nondefense capital goods, a good proxy for business investment, rose by 2.9 percent in February, compared with a 2.7 percent decline the previous month.

Other recent economic reports indicate that manufacturing activity is picking up. But many plants continue to operate well below full throttle and employment is still weak. Manufacturers cut jobs in February for the 43rd month in a row.

Hardest hit by the 2001 recession, manufacturers over the past three years have had to cope with difficult economic times at home and abroad as well as compete against a flood of imports to the United States.

Job losses, trade and overall economic conditions are hot-button issues in the presidential campaign.

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