WASHINGTON — Orders for business equipment rose in June for just the second time this year as U.S. factories start to regain their footing after a weak spell.
Bookings for non-military capital goods excluding aircraft climbed 0.9 percent last month after decreasing 0.4 percent in May, data from the Commerce Department showed Monday in Washington. Orders for all durable goods — items meant to last at least three years — increased 3.4 percent, propelled by a rebound in the volatile aircraft category.
Business investment is projected to improve as the energy industry adjusts to lower prices and companies look to expand, cushioning the hit from cooling foreign economies and a stronger dollar that will probably continue to damp sales of American-made goods. U.S. consumer spending on big-ticket items such as automobiles, fueled by strong hiring and gains in housing.
‘We’re seeing domestic activity continue to push through, despite the headwinds of sluggish global growth and the strong U.S. dollar,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA Inc. in New York, who correctly projected the gain in total orders. “That should allow the economy to move forward at a decent pace.”
The median forecast of 71 economists surveyed by Bloomberg projected total durable goods orders would rise 3.2 percent. Estimates ranged gains of 0.9 percent to 6.4 percent.
The data were boosted by a 66.1 percent jump in bookings for non-military aircraft, according to the Commerce Department’s report.
Boeing Co., the Chicago-based aerospace company, said it received 161 orders for aircraft in June, a surge from 11 in the prior month. Deliveries also climbed, to 71 from 60 that the company shipped in May.
Excluding transportation equipment, orders rose 0.8 percent, the biggest gain since August. They were projected to increase 0.5 percent, according to the Bloomberg survey median.
Orders for non-defense capital goods excluding aircraft are a proxy for future business investment in items like computers, engines and communications gear.
Shipments of those goods, used in calculating gross domestic product, fell 0.1 percent last month and the prior reading was revised to show a 0.3 percent drop that was larger than previously estimated. The figures indicate that business investment and/or exports remained weak last quarter.
The commodities market poses a challenge. Oil prices have been swept up in a broad selloff of raw materials, which have fallen to a 13-year low over concerns that economic growth will stagnate in China, the biggest consumer of energy, metals and grains.
Even with recent setbacks, the past few months have shown signs of a letup from the global plunge in crude prices that had triggered cutbacks in investment since mid-2014.
The drop in the fabrication of oil-drilling equipment is abating, and factories are producing more communications gear and other business equipment, recent Federal Reserve data showed. Total industrial output rose 0.3 percent in June, propelled by advances in mining and utilities.
Automobile demand, while slower in the latest monthly results, remains an encouraging spot for the durable goods industry. Sales of cars and light trucks sold at a 17.1 million annualized rate in June after 17.7 million in May, according to Ward’s Automotive Group. It capped the strongest quarter since 2005.
Consumer purchases, which account for about 70 percent of the economy, are getting a boost from progress in the job market. Employers added 223,000 workers to payrolls in June, and the unemployment rate fell to the lowest level in more than seven years.
By contrast, overseas growth is spotty, one reason U.S. exports declined in May by the most in three months. The dollar’s advance since June 2014 also means American-made goods are more expensive for customers abroad.
Sluggish international markets are damping earnings at U.S. industrial giants. 3M Co. reduced the top end of its 2015 profit and revenue forecasts, citing lower-than-expected global economic growth. Caterpillar Inc., the largest maker of construction and mining machinery, last week cut its full-year sales forecast and said important end-user industries remain weak.
“While economic conditions in the United States are modestly positive, the global economy remains relatively stagnant,” Chief Executive Officer Doug Oberhelman said in a statement. “Many of the key industries we serve remain weak, and we haven’t seen sustained signs of improvement.”
Taking a step back, figures last week revealed a more restrained picture for manufacturing in recent years than previously estimated. Annual revisions to industrial production data released by the Fed showed output at factories, mines and utilities returned to its pre-recession peak in May 2014, seven months later than the Fed previously reported, while estimates of durable goods production for 2012 and 2013 were almost halved.
— With assistance from Jordan Yadoo in New York.