The US Census Bureau released a report on Thursday, December 4th, stating that factory orders in the US increased by a modest 0.2% in September. This growth rate was lower than market expectations. However, non-defense capital goods orders, excluding aircraft, increased by 0.9%, indicating the manufacturing sector’s underlying strength.
Although factory orders in September grew by 0.2%, below the economists’ previous estimate of 0.5% and lower than August’s 1.3% increase, the year-on-year growth rate was 3.5% higher than the same period last year. The delayed release of the report was attributed to the 43-day federal government shutdown in the US.
Manufacturing accounts for about 10.1% of the US economy. The report highlights that the overall performance of the US manufacturing sector continues to be affected by the uncertainty surrounding tariff policies, which has led to cost implications in the supply chain and uncertainty in economic trends. However, increased spending in the field of artificial intelligence (AI) has boosted some manufacturing sectors, partially offsetting the overall weakness in manufacturing.
The report also showed that non-defense capital goods orders excluding aircraft increased by 0.9% in September. This data is considered a significant indicator of corporate expenditure plans for equipment and is in line with the data released last week. Additionally, the shipment volume of these core capital goods also increased by 0.9%, surpassing market expectations. This demonstrates the potential strength of the manufacturing sector and suggests an optimistic economic growth outlook driven by corporate equipment spending.
Analysts noted that the manufacturing sector’s recovery still faces challenges due to uncertainty. However, strong demand for technology and AI investments provides robust support for the growth of factory orders, potentially helping to offset some unfavorable factors in the US economic environment in the future.
Furthermore, the Organization for Economic Cooperation and Development (OECD) raised its economic growth expectations for the US in its latest Economic Outlook report released on Tuesday, December 2nd. The report stated that the US economic performance exceeded previous expectations this year, with a surge in technology industry investments and a pre-tariff import boom boosting economic activity, helping to counteract the slowdown in job growth and reduced household spending drag.
According to the OECD report, the US economy is now expected to grow by 2% in 2025, higher than the 1.6% forecasted in June. This upgrade reflects the unusually rapid growth in investments in information processing equipment, software, and data center construction over the past year. Even with increasing tariffs, reduced net migration, and end-of-year government shutdown pressures on demand, the economy continues to have buffers.
If excluding investments related to artificial intelligence (the report indicates that such investments are “continuing to flourish”), GDP for the same period would decline by 0.1%, highlighting the degree to which technology spending supports overall output.
(This article references reports from Reuters and English Epoch Times)