The weak demand for electrical and transport equipment resulted in low number of factor good orders in the United States. Though the US economy is showing the signs of great recovery, the manufacturing sector is not witnessing any progress. The data from commerce department pointed out slow growth in the sector. The goods order dropped by 1 percent in May after 0.7 percent decrease in the month of April. If we see the data of last 10 months, factory orders have been declining in all nine of them.
The experts predicted fall of 05 percents next month. The transport component would remain volatile. U.S. Economy gets around 12 percent of the GDP from the manufacturing activity but lower oil prices, stronger dollar and decreasing exports are crippling the sector. The developed economy of the United States is now more focusing on the service sector, which earns more profit. The multinational corporations and energy firms are reporting sharp decline in the profit. The economists said that the sector is settling down for faster growth period. The institute of supply management report said that activities have reached five month high.
The institute publishes its national factory index and the data said that the sub-index for new ordered showed growth for consecutive third month. The crude oil prices are slowing increasing after a massive decrease of 60 percent last year. The energy corporations are not building more oil rigs on the US soil now so there is no chance of flooding market with large quantity. Overall the picture looks optimistic for the economy.