Demand dips slightly in December

Despite a drop in orders, experts are still positive about the economy in 2014.

Although orders for U.S. manufactured goods fell a bit in December, experts are not worried it will have a huge effect on the economy.

Orders for durable goods dropped 4.3 percent in December after a 2.6 percent rise November, according to the U.S. Department of Commerce. Reuters reported the fall in December is the largest decrease since July

The tumble may be due to a small demand for primary metals, transportation equipment, fabricated metal products, computers and electronic products and capital goods, according to Reuters. Kevin Cummins, an economist for UBS said in an interview with USA Today the market overall fell below expectations.

"Durable goods orders were weaker than expected across the board," Cummins said. "Orders were weaker than shipments, and that makes the outlook a little more murky."

A poll conducted by Reuters projected orders for durable goods would increase by 1.8 percent in December.

Drop in orders for certain industries
The fall may be partially due to a 1.6 percent decrease in orders for commercial aircrafts. Although this comes after Boeing received 319 orders for planes in November, compared with the 110 the Illinois-based company produced in November.

Along with durable goods, other sectors took a slight dive in December as well. Non-defense capital goods, which is a closely watched market, dropped 1.3 percent over the past month, despite rising by 2.6 percent in November.

Positive expectations ahead
Even though several sectors showed a slight sink in December, not all the news for the manufacturing industry was bad. Inventories for durable goods increased 0.8 percent in December, which is a signal of a strong GDP reading for the fourth quarter of 2013. Bloomberg reported manufactures produced plenty of cars and appliances in December to have one of the strongest quarterly gains since 2010. Several regional central banks, including Dallas, Philadelphia and New York reported increases for their sectors in December.

Even though several industries saw drops in orders, many experts believe this is just a blip on the radar. Gus Faucher, a senior economist at PNC Financial Services Group, said in an interview with Reuters the economy for 2014 should have nothing to worry about.

"Things have continued to look good at the end of 2013 and beginning of 2014," Faucher said. "I would expect that we are going to continue to see growth this year that's above what we observed in 2014."

Companies looking to hire experienced workers to help with demands can enlist the services of manufacturing recruiters.

×