clarinews@clarinet.com (VINCENT DEL GIUDICE, UPI Business Writer) (02/03/90)
WASHINGTON (UPI) -- Demand for airplanes, ships and military tanks sent factory orders up 1.9 percent in December for a second monthly rebound after a disappointing October, the government said Friday. The $4.5 billion surge to $244.2 billion followed a 2.4 percent increase in November and a 0.1 percent drop in October, the Commerce Department said. Factory orders finished 1989 at $2.8 trillion, 6.4 percent ahead of 1988. ``I think it's important to point out this data is another indication that economy is not sliding into a recession,'' said Norman Robertson, chief economist for Mellon Bank in Pittsburgh. ``In general the (December) increase suggests perhaps that we might see a steadier pattern of activity in the industrial sector, which has been weakening for the past several months,'' Roberston said. Factory inventories declined by $1.3 billion or 0.4 percent to $371.5 billion, the first decrease since September and largest since a 0.4 decline in September 1986, the department said. In Chicago, Robert Dederick, chief economist for Northern Trust, said, ``I think you'd have to see this was a positive report in part because of the inventories,'' which signal an economic slowdown when on the increase. ``The inventories, which weren't really rising rapidly, took this sharp plunge,'' Dederick said. ``Taking it at face value, this seems to suggest they have moved very quickly in manufacturing to keep inventories from causing a problem.'' New orders for durable goods, products made to last three or more years, increased by $4.2 billion or 3.2 percent in December to $134.4 billion, with transportation equipment leading the way -- up $4.1 billion or 11.2 percent to $40.9 billion. ``Large increases in aircraft and parts and shipbuilding and tanks more than offset a decline in motor vehicles and parts,'' according to the monthly report prepared by the department's Census Bureau. In other industries: --Orders for electrical machinery increased $1.1 billion, or 5 percent, to $22.7 billion, offsetting a decline in non-electrical equipment of $1.1 billion or 4.7 percent to $21.6 billion. --Primary metals were down $0.4 billion, or 3.8 percent, to $10.8 billion. --December orders for non-durable goods were up by $300 million, or 0.3 percent to $109.9, with petroleum products recording the largest increase. Shipments of durable goods, meanwhile, were down $1.1 billion, or 0.9 percent, to $122.1 billion, while December's shipments of non-durable goods were flat at $109.7 billion, the department said. For the year, durable shipments totaled $2.8 trillion, a 6.5 percent increase over 1988 shipments.