WASHINGTON (Reuters) – New orders for core US-made capital goods rose in June despite supply constraints that hampered production at some factories, suggesting the company’s spending on equipment may remain strong after the second quarter .
Capital goods orders outside the defense sector, excluding aircraft, rose 0.5% last month, a closely watched indicator for corporate spending plans, the Commerce Department said on Tuesday.
Orders for the so-called capital goods core rose 0.5% in May.
Economists polled by Reuters predicted orders for core capital goods would increase by 0.7%.
Business investment in equipment soared during the COVID-19 pandemic, which supported manufacturing, which accounts for 11.9% of the US economy. Meanwhile, consumer spending shifted from services to goods as millions of Americans stayed home.
Record low interest rates and massive fiscal stimulus measures provided an additional boost, creating supply constraints.
While demand for services is returning, with less than half of the US population fully vaccinated against the coronavirus, spending on goods is expected to remain high.
Major capital goods orders were boosted last month by rising demand for machinery and primary metals as well as computers and electronics. Order electrical equipment, tools and components have not changed.
(Por Lucia Muticani)