US factory orders plunge 14.4 percent as economy grinds to halt

By MARTIN CRUTSINGER AP Economics Writer

WASHINGTON (AP) — Orders for big-ticket manufactured goods plunged 14.4 percent in March, the second-biggest decline on record. The worse-than-expected slide underscored the severity of the economic impact from the pandemic.

New orders for commercial airlines actually went negative as cancellations outpaced sales. Those orders plunged 295.7 percent with skies largely empty of planes. The last time so few people traveled by plane was in the pre-jet era.

A worker checks protective masks being manufactured in Warren, Mich., Thursday, April 23, 2020. General Motors has about 400 workers at the now-closed transmission plant in suburban Detroit. All over the country, blue-collar and salaried workers have raised their hands to make medical equipment as companies repurpose factories to answer calls for help from beleaguered nurses, doctors and paramedics who are treating patients with the highly contagious new coronavirus COVID-19. (AP Photo/Paul Sancya)

The March decline was surpassed only by an 18.4 percent drop in August 2014. There was a 1.1 percent gain in February, before the government-mandated shutdowns to contain the virus had begun. Demand in a key category that serves as a proxy for business investment eked out a 0.1 percent gain, but that followed a 0.8 percent decline in February.

The report Friday from the Commerce Department showed widespread weakness, with demand for transportation products falling 41 percent. Demand for motor vehicles and commercial airliners both tumbled.

The dire numbers from Commerce followed a report showing that manufacturing production collapsed in March, with declines that have not been seen since the country demobilized after World War II.

And worse is on the way.

The numbers from March capture only the beginning of the lockdown in mid-March. When April manufacturing numbers are released next month, the full force of the pandemic will be on display.

“We expect the coronavirus will deal a severe blow to U.S. business spending via suppressed global and domestic demand, broken supply chains, depressed oil prices, tighter financial conditions and elevated uncertainty,” said Gregory Daco, chief economist at Oxford Economics.

“This will translate into some of the largest pullbacks in capital spending of all time,” Daco said.

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