Orders to U.S. factories rose 0.7 percent in April, the second increase in three months, the Commerce Department reported Wednesday, offering further evidence that the manufacturing sector may be set to rebound. April's performance was slightly worse than analysts had predicted. Factory orders fell 1.9 percent in March. Shipments fell 0.2 percent in April—the ninth consecutive decline—through at a much slower pace than the 1.8 percent drop in March. Orders for motor-vehicle parts rose 2.2 percent in April. A 5.8 percent jump in transportation equipment—including motor vehicles—drove the overall increase in factory orders. Orders for durable goods—expensive manufactured items—rose 1.7 percent. Orders for non-defense capital goods excluding aircraft—seen as a gauge of business investment—fell 2.4 percent, a sign that businesses are still spending less amid the weak economy. Orders for machinery increased 0.6 percent, while electrical-equipment and appliance orders rose 0.9 percent. Orders for consumer goods, including food, chemicals, and paper products, declined 0.1 percent. Manufacturers have been hurt by the recession, which has reduced both domestic shipments and exports. The auto industry is particularly battered, as both General Motors (GM) and Chrysler have filed for bankruptcy protection in the last month. Their restructuring plans include sharply reducing U.S. production, which also puts thousands of their suppliers at risk.
