FILE PHOTO: Line workers spot weld parts of the frame on the flex line at Nissan Motor Co’s automobile manufacturing plant in Smyrna, Tennessee, U.S., August 23, 2018. REUTERS/William DeShazer/File Photo

WASHINGTON (Reuters) – New orders for U.S.-made goods were unexpectedly flat in February, and could remain weak as a global coronavirus outbreak strains supply chains and undercuts the manufacturing sector.

The Commerce Department said on Thursday the unchanged reading in factory orders followed a 0.5% decline in January. Economists polled by Reuters had forecast factory orders would increase 0.2% in February.

The Institute for Supply Management (ISM) reported on Wednesday that its index of national factory activity fell to a reading of 49.1 in March from 50.1 in February. A reading below 50 indicates contraction in the manufacturing sector, which accounts for 11% of the U.S. economy.

As well as causing disruptions in supply chains, the coronavirus pandemic has shut down demand, with the transportation industry almost crawling to a halt, and restaurants, bars and other social venues shutting.

The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, fell 0.9% in February instead of declining 0.8% as reported last month.

Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, decreased 0.8 in February, rather than falling 0.7% as previously reported.

Reporting by Lucia Mutikani; Editing by Paul Simao

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