WASHINGTON – American manufacturing orders experienced minimal growth during January, climbing just 0.1% as declining transportation equipment purchases counterbalanced improvements in other sectors, according to Wednesday’s government report.
The Commerce Department’s Census Bureau revealed that factory orders increased slightly following a revised December decline of 0.4%. Economists had anticipated this modest uptick. December’s figures were initially reported as a steeper 0.7% drop but were later adjusted. Compared to the same period last year, January orders jumped 3.5%.
Data releases continue to experience delays as the Census Bureau works to catch up following disruptions from last year’s government shutdown.
The manufacturing sector, representing 10.1% of the nation’s economy, continues struggling under the impact of President Trump’s extensive tariff policies. Additional cost burdens stem from the U.S.-Israeli conflict with Iran, which has driven oil prices up more than 40%.
Trump maintains his defense of the tariff measures, despite Supreme Court challenges, arguing they’re essential for protecting American manufacturing. However, approximately 100,000 factory positions have disappeared since January 2025.
While increased oil and gas drilling activity could potentially boost manufacturing due to higher energy prices, economists believe any investment benefits would likely prove inadequate to counteract the negative effects of costlier energy products. Such improvements may also take considerable time to impact the broader economy.
January’s factory order gains were driven by increased demand for machinery and primary metals, along with computers and electronic products – likely connected to artificial intelligence investment expansion.
However, electrical equipment, appliances and components saw orders drop 0.6%, while transportation equipment fell 0.8% as defense aircraft and parts demand plummeted 23.8%.
The Census Bureau additionally reported that non-defense capital goods orders excluding aircraft – considered an indicator of business equipment spending intentions – rose 0.1% in January rather than remaining flat as initially reported last week.
Shipments of these core capital goods decreased 0.1% as previously stated. Business equipment spending decelerated during the fourth quarter, contributing to gross domestic product growth slowing to a 0.7% annualized rate, down from the third quarter’s 4.4% pace.
