by News Staff Posted Jun 4, 2012 11:27 am MDT WASHINGTON – Companies placed fewer orders to U.S. factories for the second straight month and a key measure that tracks business investment plans fell, adding to evidence that the economy is weakening.The Commerce Department said Monday that orders for factory goods fell 0.6 per cent in April from March.Demand for so-called core capital goods, such as heavy machinery and computers, dropped 2.1 per cent in April. That followed a 2.3 per cent decline in March.Core capital goods are a good proxy for business investment plans. The declines suggest companies may be worried about a weaker U.S. job market, which could crimp consumer spending. Businesses may also fear the worsening European debt crisis and slower growth in China could slow demand for U.S. exports.Even with the declines, factory orders are well above their recession lows. Orders in April totalled US$465.98 billion, up 38.7 per cent from the recession low reached in March 2009. Orders are still 3.1 per cent below the peak reached in December 2007, the month the recession began.Economists said they expect the recent decline in factory orders to be reversed in the coming months. They predicted manufacturing would remain a source of strength for the economy this year.John Ryding and Conrad DeQuardros of RDQ Economics noted that the Institute for Supply Management’s survey of manufacturing activity showed new orders rose to a 13-month high in May.“We think U.S. manufacturing remains in good shape and that it will continue to expand at a solid rate in the coming months,” they wrote in a note to clients.Still, the April report on factory orders was discouraging.Demand for durable goods, items such as autos and aircraft that are expected to last at least three years, were flat in April. That represented a downward revision from a preliminary estimate that durable goods orders had risen a slight 0.2 per cent in April.Orders for nondurable goods, which include processed food, chemicals, gasoline and paper, fell 1.1 per cent in April. Part of that drop likely reflected lower gas prices, which have tumbled since peaking in early April. The figures are not adjusted for inflation.Orders for transportation equipment rose 2.2 per cent. That largely reflected a 7.2 per cent rise in demand for commercial aircraft, which offset a 0.5 per cent drop in demand for autos and auto parts.Demand for primary metals such as steel increased 0.9 per cent. But machinery orders fell 2.9 per cent, reflecting weakness in orders for industrial machinery and turbines and generators.Orders for computers declined 5.9 per cent, while demand for non-defence communications equipment fell 17.4 per cent.On Friday, the government said U.S. employers added only 69,000 jobs in May, the fewest in a year and the third straight of subpar hiring. The unemployment rate rose from 8.1 per cent in April to 8.2 per cent last month.Factories were one of the few industries to create jobs in May. They added 12,000 jobs, helped by rising demand for U.S. exports and a boom in car sales. AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Businesses placed 0.6 per cent fewer orders to US factories in April, 2nd straight decline
Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)RelatedMacroeconomic indicators point to a struggling economy- AliAugust 25, 2017In “Business”PAC Chairman warns of further tax losses for GovtJuly 9, 2017In “Politics”Irfaan Ali scolds Finance Minister Jordan over ‘fairy-tale’ excusesAugust 22, 2016In “Politics” – according to former Minister Irfaan Ali Even with increased production in the key traditional sectors, data compiled in the recent mid-year Finance Ministry Report has clearly showed that the economy is eroding at a fast rate.This is according to former Government Minister, Irfaan Ali, who said it therefore means that the local Guyanese economy could experience some challenges going forward.Ali pointed out that as foreign exchange tanked, imports will become relatively expensive. “Overall, imported goods would become relatively expensive, hence stoking inflation in the process,” he contended.Ali noted that net foreign reserve plummeted from US$633 million in June 2016 to US$574 million in mid-2017; the lowest ever recorded in over seven years.“In other words, the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government destroyed in two years what the PPP/C [People’s Progressive Party] took to amass in 7 years. Even more worrisome, external debt increased by US$53 million to US$1,200 million,” he added.The Opposition Member of Parliament said it is also worthwhile to mention that net foreign revenue to external debt ratio had increased from 172 per cent in mid-2016 to 207 per cent in mid-2017.Opposition Leader Bharrat Jagdeo had also bashed the APNU/AFC coalition Government, saying that it remains clueless and hapless, even as the country’s economy continues on a downward spiral.Former Minister and PPP/C Member of Parliament,, Irfaan AliThe former President had also called out the Government for refusing to concede to advice and recommendations, which could in effect help to put the country back on the road to recovery.He accused the Administration of taking a laid back approach, while Guyanese continue to feel the brunt of a dilapidated economical structure.Under the PPP/C Administration, Guyana had the fastest growing economy in the region. And from 2006 to 2014, Guyana’s economy experienced continuous, positive growth. This was the longest period of uninterrupted growth in the history of Guyana. The average growth rate was 4.5 per cent per annum.In 2014, the last full year of the PPP/C in office, Guyana’s GDP was US$3.1 billion. That was up from US$1.4 billion in 2006, an increase of 121.4 per cent. The country’s Gross International Reserve held at the Bank of Guyana at the end of 2014 was US$665.6 million, which was equivalent to 3.6 months of imports. It was up from US$251.4 million in 2005, an increase of 164.76 per cent.The PPP/C administration had drastically reduced the huge debt it had inherited from a previous PNC regime. And the PPP/C reduced the external debt to just 39.5% of GDP. That was also a reduction from 2006 when the debt to GDP was 71.8 percent. This has been described as a good demonstration of the prudent financial management by the PPP/C and the dynamic growth of the economy.In this year’s mid-year report, it was stated that the overall balance of payment recorded a deficit of US$46 million during the first half of 2017. According to the report, key traditional products such as sugar, timber, rice and even gold have all recorded a decline in export earnings from US$518.7 million in mid-2017 to US$503.5 million in 2016 during similar period.At the end of the reporting period, exports stood at US$685.1 million and imports at US$808.9 million. To offset this enormous deficit, Government turned their attention to the Bank of Guyana net foreign assets, where US$18.3 million was expended.