October 22, 2024

June Factory Orders Fall As Demand For Aircrafts Plummets

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Key Takeaways

  • Factory orders declined in June, adding to recent data that shows a downturn in manufacturing in the U.S.
  • The 3.3% monthly drop in factory orders reported Friday is the largest in more than a year and the biggest drop since January.
  • The decline was paced by lower factory orders for transportation equipment, which were down by more than 20% on the month.

A sharp drop in aircraft demand sent new factory orders , an index tracking manufacturing activity, lower in June.

New orders for manufactured goods declined by 3.3% in June when compared with the prior month, Census Bureau data Friday showed. It’s the second straight month of declines for the measurement of factory orders, coming after three months of improvements.

Economists surveyed by The Wall Street Journal and Dow Jones Newswires were expecting a more modest decline of 3.2%.

Largest Percentage Decline in a Year

The monthly drop in factory orders in June was the largest by percentage in the past year, the data showed, and the steepest 2024 decline since January. The data comes after manufacturing Purchasing Managers’ Index (PMI) data for July showed that activity in that sector was slowing .

Investors follow factory orders for insight into economic growth, as lower readings on orders can show that growth is slowing.

Transportation Orders Plunge

Leading the decline in June factory orders was transportation equipment, composed mainly of aircraft orders , which was lower by more than 20% in June from the prior month, coming after a slight increase in May. Overall, factory orders for durable goods were lower by 6.7% in June.

Meanwhile, machinery orders were higher by 1.5% in June, while computer and electronics orders were also slightly higher.

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