Factory orders post significant gain in May

WASHINGTON -- US factories saw orders rise by 2.9 percent in May, the biggest gain in 14 months, with most of the strength reflecting robust demand for airplanes and parts.

The sizable advance came after 0.7 percent increases registered in both March and April, the Commerce Department reported yesterday.

While the pickup in May was welcome, the latest snapshot of manufacturing activity showed that improvements across various sectors were uneven.

New bookings for machinery and computers fell in May. Orders for cars and primary metals, including steel, were flat.

But demand for airplanes, household appliances and furniture all posted gains. Orders for food products and clothing also went up.

''On average manufacturing is doing OK, but with a lot of individual industry variation," said Ken Mayland, president of ClearView Economics.

The overall performance in May was close to the 3 percent increase in orders to factories that economists were forecasting before the report was released.

Excluding orders for airplanes and other transportation equipment, though, factory orders dipped by 0.1 percent in May. This category saw orders decline by 0.4 percent in April.

Manufacturing has sometimes had a bumpy road to recovery from the 2001 recession. Still, factory activity is considered to be in good shape despite the toll of high energy prices and increases in the costs of some raw materials.

The 2.9 percent increase in overall orders to US factories in May was the largest since March 2004, when new bookings rose by 5 percent.

In May, orders for all durable goods rose by 5.5 percent, up from 1.5 percent in April.

Meanwhile, demand for nondurable goods, including food and clothing, edged up 0.1 percent in May. That followed a decline of 0.1 percent in April.

Shipments, a barometer of current demand, was flat in May, after rising by 0.7 percent in April.