Factory orders jump, but much weakness remains

WASHINGTON - Orders to U.S. factories for long-lasting manufactured goods increased by the largest amount in eight months. But a key category that tracks business investment plans dropped for a seventh month, suggesting that manufacturing is still struggling through a soft patch.

Orders for durable goods rebounded 4 percent in March after having fallen 1.4 percent in February, the Commerce Department reported Friday. The result was led by a big jump in demand for commercial aircraft. Outside of the transportation category, orders were down for a sixth straight month.

There was also a 0.5 percent drop in demand in the category that serves as a proxy for business investment plans. The decline followed a 2.2 percent drop in February. This key investment category has been down seven consecutive months.

Demand for commercial aircraft, a volatile category, jumped 30.6 percent in March after a 2.2 percent decline in February. Orders for motor vehicles rose 5.4 percent, and the overall transportation category expanded 13.5 percent. Excluding transportation, however, the weakness was widespread with orders down 0.2 percent.

Demand for primary metals such as steel edged down 0.2 percent, while orders for machinery dropped 1.5 percent. Demand for communications equipment fell 5.3 percent. Orders for computers rose and related equipment rose 11 percent in one of the few areas of strength in March.

U.S. manufacturers have been hurt by a labor dispute at West Coast ports that disrupted supply chains in the early part of the year. They were also hit with winter weather in many parts of the country that was harsh enough to disrupt production.

Yet more worrisome, manufacturers are struggling with the effects of a sharp rise in the value of the dollar, which cuts into exports by making U.S. goods more expensive overseas. A stronger dollar also makes imports cheaper and more competitive in the U.S.

Economists believe overall economic growth in the U.S. slowed to between 1 percent and 1.5 percent in the January-March quarter. They have high hopes for a rebound to around 3 percent for the rest of this year.