Orders to U.S. factories rose by a larger-than-forecast 1.3 percent in July, due mostly to an increase in demand for commercial aircraft, heavy machinery and iron and steel all posted solid gains, the U.S. Commerce Department said Wednesday. The increase, which was much higher than the 0.8 percent rise economists had been expecting, follows an even bigger 2.1 percent increase in June and represents the fifth straight rise in orders. The increase, economists said, was due to rising foreign demand fueled by a weaker dollar, rather than improvement in the U.S. economy. It was also helped by companies that increased their spending on equipment to take advantage of business tax breaks in the economic stimulus bill Congress passed last February, the Associated Press reported. The factory orders increase was led by a 28.1 percent rise in commercial aircraft, which rebounded from a 21.3 percent decline in June. Orders in all transportation categories rose by 3.2 percent in July, the best showing in five months. It was the second straight month that motor vehicle orders rose, increasing by 0.6 percent in July after an even bigger 3.2 percent June advance. Excluding transportation, factory orders would have risen by 1 percent, slightly below the 1.5 percent economists had been expecting. Orders for durable goods, items expected to last at least three years, rose 1.3 percent in July, unchanged from the preliminary estimate the government made last week. Orders for nondurable goods, products such as fuel, food and chemicals, increased 1.2 percent in July. A number of categories showed big gains in the month, too. Demand for iron and steel jumped by 5 percent, orders for machinery rose 4.1 percent with demand for construction machinery soaring by 17.9 percent.
