U.S. factory orders rise below expectations in March, manufacturing activity to rebound modestly

U.S. factory orders rose below consensus expectations in March. The factory orders were up 2 percent month-on-month, as compared with the consensus projection of 0.4 percent rise. Excluding transportation, factory orders dropped 0.3 percent. Capital goods orders were up 3 percent, mainly driven by the more volatile defense orders, which rose 14.2 percent. Non-defense orders were up a more modest 1.6 percent.

Excluding aircrafts, nondefense orders were up 0.5 percent, the sixth straight month of positive growth. On a year-on-year basis, orders were up 5.8 percent. The upbeat year-on-year figure is in line with the ongoing stabilization in factory orders following a period of prolonged weakness. Manufacturing activity is expected to modestly rebound in the coming year and today’s data underpins this view, noted Barclays in a research report.

“Factory data for March were weaker than expected and as a result, we lower our Q1 GDP tracking estimate by one-tenth to 0.6% q/q saar”, added Barclays