U.S. Factory Orders Rebound 0.9% in July
U.S. Factory Orders Rebound 0.9% in July
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Key Points
1
July saw broad year-over-year strength across durable goods: transportation equipment +13.7% YoY, primary metals +19.1% YoY, machinery +15.3% YoY, furniture & related products +1.6% YoY, and fabricated metal products +10.9% YoY, while computers & electronics remained up 14.8% YoY despite a MoM drop.
2
Civilian aircraft and parts orders surged 12.7% in July, helping lift total factory orders 0.9% higher for the month; defense aircraft and parts rose 4.9% and motor vehicle bodies, parts and trailers rose about 0.4%.
3
The ISM manufacturing PMI stood at 55.6 in July, the strongest reading since May 2022 and marking the seventh straight month of expansion, indicating continued momentum in manufacturing even as input costs remained elevated amid tariffs and energy pressures.
4
AI-related spending is cited as a tailwind for manufacturing activity, contributing to a positive backdrop for the sector even amid ongoing supply-chain strains from geopolitics and tariffs.
U.S. factory orders jumped 0.9% in July, beating economist expectations of 0.6% growth Tipranks. The rebound reversed June's 0.2% decline and signaled strengthening manufacturing demand across the economy. Civilian aircraft orders surged 12.7%, lifting total new orders to $663.6 billion Yahoo Finance.
The strength extends beyond aircraft. Year-over-year gains span transportation equipment (up 13.7%), primary metals (up 19.1%), and machinery (up 15.3%) Tipp Insights. Manufacturing shipments also rose 0.8%, reinforcing broader momentum even as input costs remain elevated from tariffs and global tensions.
Aircraft Orders Drive July Rebound
Civilian aircraft and parts orders exploded 12.7% in July, the primary engine behind overall factory order gains Tipp Insights. Transportation equipment as a whole climbed 2.3% to $116.2 billion Yahoo Finance. Defense aircraft and parts also contributed, rising 4.9% for the month. Without this aviation strength, factory orders would have posted a much smaller gain.
Core Manufacturing Accelerates Despite Flat Investment Orders
Factory orders excluding transportation climbed 0.6% in July, reversing a 0.1% decline from the prior month Tipranks. This suggests underlying manufacturing strength beyond just aircraft. However, core capital goods orders — a key gauge of business spending plans — remained essentially flat versus June, signaling a temporary pause in some investment.
Manufacturing shipments tell a different story. They rose about 0.8% month-over-month, with nondefense capital goods shipments climbing 1.2%. This divergence hints that businesses are shipping products they ordered earlier but holding off on new investment commitments for now.
Year-Over-Year Strength Across Most Durable Goods
Looking back 12 months, durable goods categories show broad gains. Primary metals jumped 19.1%, machinery rose 15.3%, and transportation equipment climbed 13.7% Tipp Insights. Computers and electronics remain up 14.8% year-over-year, even though they dipped month-over-month in July. Fabricated metal products gained 10.9% and furniture rose 1.6%.
Manufacturing PMI Hits Two-Year High Amid Cost Pressures
The Institute for Supply Management's manufacturing PMI hit 55.6 in July, the strongest reading since May 2022 Haver Analytics. This marks the seventh straight month of expansion, confirming sustained momentum in the sector. Readings above 50 indicate growth; 55.6 is decidedly robust expansion.
Yet manufacturers face headwinds. Input costs remain elevated due to tariffs and energy pressures from global tensions. AI-related spending is cited as a key tailwind offsetting these cost pressures Tipranks. The combination suggests manufacturing will likely stay resilient in the near term, provided tariff and supply-chain volatility does not worsen.
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