Orders for durable goods, items expected to last at least three years, rose 3.3 percent last month from March, the Commerce Department said on Friday. That followed a 5.9 percent decline in March.

A measure of business investment plans increased 1.2 percent, and the government revised the March figure to show a 0.9 percent gain, instead of a slight decrease.

Companies ordered more machinery and electronic products last month, typically signs of confidence. More spending by businesses could ease fears that manufacturing could drag on the economy later this year.

Factories had been counting fewer orders at the start of the year, in part because slower global growth had reduced demand for exports. Economists had also worried that across-the-board federal spending cuts and higher taxes might prompt businesses to cut back on orders.

Paul Ashworth, an economist with Capital Economics, said the April report suggested that economic growth was holding up. He predicts growth in the April-June quarter will be at a rate of 2 to 2.5 percent, close to the 2.5 percent rate reported for the January-March quarter.

Still, the payoff from the pickup in business investment may not come until the end of the quarter, because the government looks at shipments when it measures the gross domestic product, not orders.

In addition, shipments of goods that signal investment plans fell in April, reflecting weaker demand at the start of the year.

“Business investment appears to have started the second quarter on a weak note but should rebound over the final two months of the quarter,” Mr. Ashworth said.

The April increase pushed total orders to $222.6 billion on a seasonally adjusted basis, or 6.5 percent above the level of a year ago.

Orders for transportation goods gained 8.1 percent, reflecting a 16.1 percent jump in demand for commercial aircraft and a 53.3 percent increase in orders for military aircraft. Orders for motor vehicles increased 1.9 percent.

Excluding the volatile transportation category, orders rose 1.3 percent in April. That followed a 1.7 percent decline in March.

Still, other reports showed that factories continued to struggle in April.

The Institute for Supply Management reported that factory activity barely expanded in April, held back by weaker hiring and less company stockpiling.

And manufacturing output dropped 0.4 percent last month, the Federal Reserve reported this month. Auto companies produced fewer cars, factories made fewer consumer goods and most other industries reduced output.

The overall economy grew at an annual rate of 2.5 percent in the January-March quarter, buoyed by the fastest rise in consumer spending in more than two years.

Article source: http://www.nytimes.com/2013/05/25/business/economy/orders-for-durable-goods-rose-3-3-percent-in-april.html?partner=rss&emc=rss