Risk Management

What’s Behind The Slump In Factory-Made Sales?

Sales For Factory Goods Fall

Once upon a time, the factory represented a kind of romantically mechanized ideal of the American spirit to pull oneself up by one’s bootstraps. That may have been the case when Henry Ford was alive, but factory-made goods appear to have lost their shine to the average consumer.

The Commerce Department released its latest report on manufactured U.S. goods on Thursday (Aug. 4), and via Reuters, the news isn’t great. New orders for factory-made products slid by 1.5 percent in June. This marks the second-straight month that such orders have declined, with May’s revised number clocking in at a net loss of 1.2 percent.

There is a silver lining, though, in that experts expected such orders to slide by 1.8 percent — oh, happy day!

Reuters identified a strong U.S. dollar and slowing global demand for U.S. factory-made goods as potential contributors to the sustained decline in orders. Also, a complicating factor is a slowdown in commercial purchases from manufacturers as businesses attempt to clear out swelling inventories. Business spending fell 0.2 percent in June, though it originally reported to have fallen by 0.4 percent.

Although the main points of the Commerce Department’s report might seem to trend toward the negative, there were some isolated bright spots, such as a 0.2 percent increase in orders for machinery and a 0.3 percent rise in purchases of electrical equipment and components.

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