New orders at U.S. factories rose by much more than expected in March, government data showed on Tuesday, with non-defense orders posting their largest monthly gain in 12 years.
In more good news for the beleaguered manufacturing sector, the Commerce Department said factory orders advanced 4.3 percent in March for the strongest rise in nearly two years, after gaining a revised 1.1 percent in February. The previous month was initially reported as a 0.3 percent rise.
Wall Street had forecast orders to gain a more modest 2.3 percent in March.
Demand for durable goods — big-ticket items meant to last three years or more — rose 5.0 percent. Non-defense manufacturing orders were up 4.6 percent, the largest gain since March 1992's 5.0 percent advance, the Commerce Department said. Ex-transportation orders were also strong, pushing up 4.4 percent.
The government said non-durable goods orders, which make up a bit less than half of all factory orders, rose 3.5 percent compared with a revised 1.8 percent fall in February. February was originally reported as a 2.0 percent decline.
Factory inventories were up 0.3 percent in March, while the inventory-to-shipments ratio -- a measure of how long it would take to deplete stocks at the current shipping rate -- declined to a record low of 1.23 months' worth.