New orders for long-lasting U.S. manufactured goods were unchanged in January, a sign that factory demand remained sluggish at the start of the first quarter even as several industrial categories showed signs of strength.
The flat reading followed a 0.9 percent decline in December and pointed to continued slow growth in manufacturing at the start of the year.
The report’s weak point was business equipment demand. Orders for nondefense capital goods excluding aircraft—a closely watched proxy for business investment—were unchanged in January after rising 0.8 percent in December. Shipments in that category, which feed more directly into gross domestic product, fell 0.1 percent after a 1.0 percent gain the prior month.
That suggests business equipment spending got off to a soft start in the first quarter.
Outside that core measure, the report was somewhat better. Orders excluding transportation rose 0.4 percent, and orders excluding defense increased 0.5 percent, indicating that weakness was concentrated in a few categories rather than spread broadly across manufacturing.
Among the stronger areas, orders for primary metals rose 0.8 percent, fabricated metal products increased 0.6 percent, machinery edged up 0.2 percent, and computers and electronic products climbed 0.8 percent. Communications equipment posted a particularly strong gain.
The main area of weakness was transportation equipment, where orders fell 0.9 percent. Motor vehicles and parts slipped 0.4 percent, and orders for electrical equipment, appliances, and components fell 0.6 percent.
Defense-related orders weakened in January, but the timing matters. Defense capital goods orders fell 11.8 percent in January, while defense aircraft and parts orders dropped 23.7 percent. Those are large monthly moves but they came in the January durable-goods report, before the Iran war began on February 28.
At the headline level, shipments rose 0.6 percent in January, suggesting factory output continued to move higher even as new demand remained restrained. But the flat reading on core capital goods orders and the slight decline in core shipments pointed to weak momentum in one of the economy’s key private-sector growth engines.
The overall picture was of a manufacturing sector still expanding, but only slowly. Gains in metals, machinery, and electronics helped offset weakness in transportation, but flat core capital goods orders suggested firms remained cautious about stepping up equipment investment.
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