WASHINGTON – Manufacturing orders for essential business equipment took an unexpected downturn in April, despite continued strong investment in artificial intelligence technology driving demand across multiple sectors.
The Commerce Department’s Census Bureau reported Thursday that non-defense capital goods orders excluding aircraft – a key indicator of business investment – declined 1.1% last month. This followed a revised 3.9% increase in March.
The April decrease caught economists off guard, as Reuters polling had predicted a 0.4% rise following what was initially reported as a 3.4% March increase. These core equipment orders had also surged in February, contributing to double-digit equipment spending growth during the first quarter.
Companies continue expanding their artificial intelligence investments, driving up demand for information processing equipment and related technology products.
This AI investment trend is helping support manufacturing activity and offsetting challenges from disrupted supply chains caused by the U.S.-backed conflict with Iran, along with rising costs for commodities including oil and aluminum. Certain manufacturing sectors continue facing impacts from import tariffs.
Computer and electronic product orders decreased 0.7% in April. However, several categories saw growth, including electrical equipment, appliances, components, machinery, primary metals, and fabricated metal products. Core capital goods shipments increased 0.4% during the month, following a 1.3% March gain.
Overall durable goods orders – covering products from household appliances to aircraft designed to last at least three years – jumped 7.9% last month after a 1.3% March increase.
Aircraft orders drove much of this growth, with non-defense aircraft and parts orders surging 165.9%. Boeing’s website showed the company received 136 orders in April, mostly for higher-priced aircraft models, compared to 33 orders the previous month.
