Ahead of the Bell: Factory orders

AP News
Posted: Dec 04, 2009 6:10 AM

Factory orders likely were flat in October after five gains in six months bolstered hopes of a revival in manufacturing that should help support the overall economy.

Economists surveyed by Thomson Reuters expect orders to U.S. factories registered no change after rising 0.9 percent in September, as demand increased for durable goods, and nondurable goods such as chemicals and energy products.

The Commerce Department is scheduled to release the report at 10 a.m. EST Friday.

The Institute for Supply Management on Monday said its manufacturing index showed growth in November for a fourth straight month. The reading of 53.6 was slightly lower than October's 55.7. But any reading above 50 indicates growth.

Economists were especially encouraged that new orders _ a gauge of future production _ jumped over 60 for the third time in the past four months. The last such streak was in 2005. Of the 17 industries surveyed, 13 reported higher orders.

New orders for durable goods, items expected to last at least three years, advanced 1.4 percent in September, according to the government. Demand for heavy machinery jumped 7.9 percent, the biggest gain in 18 months. There also was strong demand for military aircraft, which helped offset a second straight drop in orders for commercial airplanes.

Orders for nondurable goods rose 0.6 percent following a 0.9 percent increase in August, led by petroleum, chemicals and food products.

The Late, Great USA