Commerce Dept.: March factory orders up 1.4%

Most growth in non-durables, while durables remain flat

By Maria Varmazis -- Purchasing, 5/2/2008 9:52:00 AM

The U.S. Commerce Department today reported that factory orders rose 1.4% in March, fueled by demand for exports and beating industry expectations of a 0.2% rise. Non-durable goods, mostly food, paper and petroleum and coal products, bumped up the rating with a 2.6% order increase after dropping in February by 1.1%; however, durable goods orders remained flat in March, rising only 0.1% in March after a 0.6% decline in February.

The weak U.S. dollar puts U.S. exports in a good position for overseas trade, boosting demand and helping to counteract the slumping domestic economy.

Economist Ryan Sweet of Moody's points to export demand for keeping the orders in positive numbers. "Trade is keeping manufacturing afloat, helping offset a portion of the decline in residential construction," Sweet says. "Export demand is putting a floor under manufacturing activity, but weakness lies ahead as the global economy slow further."

The news comes on the heels of new manufacturing index data from both the Institute of Supply Management, which both remained flat at 48.6 through March and April. Purchasingdata.com's manufacturing data showed a slightly more optimistic picture in March with the index at a value of 53.