Factory orders outside of autos and airplanes soar

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Orders for long-lasting manufactured goods outside of the volatile transportation category rose by the largest amount in eight months in November. Factories saw demand increase for computers, appliances and heavy machinery.

Total orders for durable goods dropped 1.3 percent, the Commerce Department reported Thursday. That decline reflected sagging demand for aircraft and autos. But excluding transportation, orders rose 2.4 percent, the best showing since last March.

The widespread gain outside of transportation was an encouraging sign that factories will be ramping up production and hiring more workers in coming months.

Manufacturing has been one of the standout performers so far in this recovery. U.S. businesses are getting a boost from strong foreign demand. The rise in exports has been helped by a falling dollar, which makes U.S. goods cheaper in other countries.

Part of the strength in November came from a 2.6 percent rise in orders for nondefense capital goods excluding aircraft. This category is seen as a good proxy for business investment plans. The big increase, the best gain since August, was a sign that businesses remain optimistic enough about the future to expand and modernize.

The 1.3 percent overall decline in orders was the second straight monthly setback following a 3.1 percent drop in October. That left orders at a seasonally adjusted $193.7 billion in November. That was still 20.7 percent higher than the recession low hit in March 2009.

The weakness in both November and October came from the transportation sector. In November, orders for commercial aircraft, a very volatile sector, plunged 53.1 percent. Orders for motor vehicles and parts fell 2.9 percent.

The gains outside of transportation included a 3 percent increase at factories producing primary metals such as steel.

Orders for computers and related products rose 9.4 percent and demand for communications equipment, a category that includes high-tech communications satellites, rose 5.1 percent.