Ted S. Warren  /  AP
Workers build a Boeing 737 at the company’s Renton, Wash., assembly plant earlier this year. U.S. durable goods orders surged in March, the government said Wednesday, reflecting a big rise in demand for aircraft.
updated 4/26/2006 12:07:41 PM ET 2006-04-26T16:07:41

Orders to U.S. factories for big-ticket manufactured goods soared in March by the largest amount in 10 months, reflecting a big increase in demand for civilian aircraft.

The 6.1 percent increase in orders for durable goods, everything from computers to airplanes, followed a 2.7 percent rise in March, the Commerce Department reported Wednesday.

It was the biggest advance since a 7.3 percent increase in May 2005 and was more than three times the 1.8 percent increase that Wall Street had been expecting. Two-thirds of the gain reflected a 71.1 percent jump in demand for commercial aircraft.

The manufacturing sector has been powering ahead in recent months, helped by efforts to restock lean inventories and a desire on the part of many companies to purchase new equipment to expand and modernize.

The 6.1 percent rise in durable goods orders reflected an increase of $13.3 billion, which pushed total new orders to $230.6 billion last month. Excluding the volatile transportation sector, orders would have risen by 2.8 percent.

Economists believe that the overall economy rebounded strongly in the first three months of this year after a lull in the final three months of 2005 with part of the momentum being supplied by the manufacturing sector.

Many economists believe the economy grew at an annual rate approaching 5 percent in the January-March quarter, up from a modest 1.7 percent growth rate in the October-December period. The government will release its first look at first quarter growth on Friday.

Demand for all transportation items rose by 14 percent, an increase that was powered by the 71.1 percent jump in orders for civilian aircraft. Boeing Co. reported that it had booked orders for 112 new planes during the month.

Orders for motor vehicles and parts rose by 2.8 percent while orders for military aircraft fell by 0.7 percent.

Other sectors enjoying solid gains in March included machinery, up 7.5 percent, and computers and electronic products, which also posted a 7.5 percent increase.

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