By Canadian Press

Orders for durable goods plunged in June

Jul 27, 2016 | 5:50 AM

WASHINGTON — Orders to U.S. factories for long-lasting manufactured goods fell in June by the largest amount in nearly two years, reflecting a big decline in the volatile category of commercial aircraft. The key category that tracks business investment managed a small gain.

Demand for durable goods dropped 4 per cent in June, the biggest setback since an 18.4 per cent drop in August 2014, the Commerce Department reported Wednesday.

The new report indicates manufacturing remains under stress from weak global demand and a strong dollar.

June’s result was led by a 58.8 per cent plunge in orders for commercial aircraft. Outside of transportation, orders were down 0.5 per cent.

Demand in a closely watched category that serves as a proxy for business investment plans edged up a slight 0.2 per cent after two months of declines. This category has shown monthly increases only three times so this year. Orders in the investment category through the first half of this year are down 3.8 per cent compared to the same period a year ago.

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American manufacturers are struggling with a strong dollar, which makes U.S. products more expensive on foreign markets, and a sluggish global economy. Concerns about a slowing Chinese economy roiled financial markets at the beginning of the year. Markets were again sent into a brief tailspin following the June 23 vote in Britain to leave the European Union.

The 4 per cent decline in orders in June followed a 2.8 per cent drop in May and a 3.2 per cent rise in April.

For June, one of the few areas of strength was autos and auto parts, which increased 2.6 per cent. Orders for primary metals such as steel, computers and machinery all declined.

Martin Crutsinger, The Associated Press