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Factory orders drop 3.9% in December

February 06, 2009|Associated Press

WASHINGTON — Orders to U.S. factories fell for a record fifth straight month in December, closing out the worst year for U.S. manufacturers since 2002. Analysts say the deepening recession will mean further weakness in coming months.

The Commerce Department said Thursday that orders dropped 3.9% in December, an even bigger decline than the 3% that economists had been expecting. The weakness was widespread, with industries including autos, heavy machinery and computers all reporting big declines in demand.

For all of 2008, factory orders rose 0.4%, the weakest showing since orders fell 1.8% in 2002.

Analysts are forecasting that manufacturers will continue to face hard times in the coming year because of a deepening U.S. recession and the weakness that has spread worldwide, cutting sharply into demand for U.S. exports.

For December, demand for durable goods, or products expected to last at least three years, fell 3%, even worse than the 2.6% drop that the government initially reported last week.

Demand for nondurable goods, or products such as food, paper and petroleum, fell 4.8% in December after an 8.7% drop in November. Some of this decline reflects the decrease in energy prices in recent months.

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