Orders to U.S. factories likely increased in November, reflecting stronger demand for commercial aircraft.
Economists forecast that orders for durable goods rose 2 percent, according to a survey by FactSet. The Commerce Department will release the November report at 8:30 a.m.
In October, durable goods orders fell for a second straight month, declining 0.5 percent. So-called core capital goods, considered a proxy for business investment plans, fell 0.8 percent. But that decline came after two solid months of gains.
Demand for core capital goods _ nondefense equipment excluding aircraft _ has been surging this year. It's been spurred by tax breaks allowing companies to write off their investments in one year, as long as the purchases are made before 2011 ends.
Manufacturing has been one of the bright spots for the economy. U.S. factory activity has been helped by a surge in exports. But some economists are concerned that Europe's debt crisis will push that region into a recession, cutting demand in a foreign market that accounts for about one-fifth of U.S. exports.
Factory output dropped 0.4 percent in November. The decline reflected mainly a drop in production of autos and auto parts. But outside autos, which can be volatile from month to month, production rose in other categories.
The Institute for Supply Management said its manufacturing index rose to 52.7 in November, up from 50.8 in October. Any reading above 50 indicates expansion. The November performance marked the 28th straight month of growth in the manufacturing sector.
Factory output had slowed in the spring, reflecting supply disruptions caused by the March natural disasters in Japan. With production recovering in Japan, supplies of automotive and electronic parts are now flowing more freely. U.S. factories have been able to resume more normal production after slowdowns earlier in the year.