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Factory Orders Rise Weak 0.1% in November

December 31, 1987|Associated Press

WASHINGTON — Orders to U.S. factories for manufactured goods edged up a tepid 0.1% in November, the poorest showing in three months, the government reported today.

The Commerce Department said that orders for both durable and non-durable goods climbed to $209.66 billion in November after a sharp 1.3% increase in October.

The lackluster showing in November was likely to raise concerns among economists about whether businesses have begun to cut back on orders because of fears growing out of the Oct. 19 record drop in the stock market.

Some economists believe that consumers have been so shaken by the 508-point stock plunge that they will reduce spending, especially for big-ticket items such as cars and appliances, forcing businesses to reduce production plans.

Strength Forecast

However, other economists argue that manufacturing will remain strong in the coming year because of the growing demand for U.S. exports, fueled by the weakened dollar.

The strength in exports has helped push total orders up by 7.2% in the first 11 months, contrasted with a 0.6% decline in manufacturing orders for all of 1986.

Orders in the key category of non-defense capital goods fell 2.4% in November. This category has been a source of strength this year as factories purchased capital equipment to expand and modernize in response to the increased demand for exports.

The sector showing the most weakness in November was the computer category, which fell 18.5% to $4.11 billion.

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