Orders for US key capital goods increased in March, increasing expectations that the nation’s economy is rebounding from the 2020 recession following positive reports in unemployment claims and retail sales, Reuters reports.
Orders for non-defense capital goods excluding aircraft increased by 0.9% from the previous month in March after falling 0.8% in February, when severe winter weather shut down parts of the United States. The year-over-year growth was 10.4%.
According to Reuters, In March, core capital goods orders were boosted by machinery, primary and fabricated metal products, as well as computers and electronic products. But orders for electrical equipment, appliances and components dropped 1.5%.
Even though factory activity measure are at multi-year highs, manufacturing for large capital goods may be impacted by a shortage of computer chips that has slowed productions of technology-heavy equipment like cars.
“With demand being boosted by fiscal stimulus, corporate borrowing costs still low and the manufacturing new orders surveys going from strength to strength, we expect investment to continue expanding at a robust pace this year,” said Andrew Hunter, a senior U.S. economist at Capital Economics.