Due to a sharp decline in commercial aircraft orders, U.S. factory orders fell by 4.8% month-on-month in June
In June, new manufacturing orders in the United States fell by 4.8% month-on-month, mainly due to a significant decrease in commercial aircraft orders, reversing the strong rebound seen in May. Despite the decline in June, overall orders still grew by 3.8% compared to the same period last year. Manufacturing accounts for 10.2% of the U.S. GDP, and its development has been weakening in recent years, constrained by multiple factors, particularly the trade policies of the Trump administration, which have led to rising production costs and supply chain limitations. The manufacturing activity index fell to a nine-month low in July, indicating a weakening momentum in the manufacturing sector
According to the data released by the U.S. Census Bureau of the Department of Commerce, due to a significant decrease in commercial aircraft orders, new manufacturing orders in the U.S. fell sharply by 4.8% month-on-month in June, reversing the strong rebound in May caused by a surge in aircraft orders.
The data shows that the decline in U.S. factory orders in June was in line with economists' expectations surveyed by foreign media. The increase in orders for May was revised up from the previously reported 8.2% to 8.3%. Despite the decline in June, overall orders still grew by 3.8% compared to the same period last year.
The Department of Commerce pointed out that the decline in orders was mainly influenced by the sharp reduction in commercial aircraft orders. As aircraft are high-priced capital goods, their order fluctuations have a significant impact on overall manufacturing data. The surge in aircraft orders in May had driven a recovery in overall manufacturing, while the sharp drop in June quickly pulled down the overall data performance.
Manufacturing accounts for 10.2% of the U.S. gross domestic product, but in recent years it has been constrained by multiple factors, leading to a weakening development trend. Especially under the aggressive trade policies promoted by President Trump, the manufacturing sector faces greater challenges. The Trump administration imposed high tariffs on various imported goods, which, although aimed at protecting domestic industries and increasing fiscal revenue to balance the fiscal gap caused by tax cuts, also led to rising production costs and limited supply chains.
Data released last Friday by the Institute for Supply Management (ISM) showed that the U.S. manufacturing activity index fell to a nine-month low in July, further indicating that manufacturing momentum is weakening.
Economists generally believe that Trump's plan to "revitalize" manufacturing through tariffs is unlikely to be realized in the short term. On one hand, the U.S. is facing a labor shortage, making it difficult for companies to quickly expand production capacity; on the other hand, adjustments to manufacturing infrastructure and the restructuring of supply chains cannot be completed overnight
