US factory orders rebound in November on commercial aircraft demand

• Commercial aircraft orders soared 97.6% in November, with additional gains in electrical equipment, fabricated metal products, and machinery orders up 0.3%
• Core capital goods orders (non-defense excluding aircraft) were revised down to 0.4% growth from initially reported 0.7%, signaling slower business equipment investment
• Manufacturing accounts for 10.1% of the economy and faces pressure from import tariffs, though AI boom and new tax legislation with permanent bonus depreciation may support recovery in 2026

Summary: US Factory Orders Rebound in November on Commercial Aircraft Demand

US factory orders rose 2.7% in November, exceeding economist expectations of 1.6%, following a revised 1.2% decline in October. The surge was primarily driven by a 97.6% spike in commercial aircraft orders, according to the Commerce Department's Census Bureau report released January 29.

Key Data Points:

• Year-over-year orders increased 3.4% in November
• Orders for electrical equipment, appliances, components, and fabricated metal products showed solid gains
• Machinery orders rose 0.3%; computer and electronic product orders remained flat
• Non-defense capital goods orders (excluding aircraft) increased 0.4%, revised down from initial 0.7% estimate
• Core capital goods shipments rose 0.2%, below previously reported 0.4%

Market Context:

Manufacturing represents 10.1% of the US economy and has been pressured by President Trump's import tariffs, though certain sectors have benefited from trade protection. The AI boom continues supporting the technology sector. Business equipment investment expanded at a 5.2% rate in Q3, contributing to the fastest economic growth in three years.

Outlook:

Economists maintain cautious optimism for broader manufacturing improvement in 2025, anticipating reduced drag from import duties and positive effects from new tax legislation making bonus depreciation permanent.

Important Note:

The report was delayed by a 43-day federal government shutdown, potentially affecting data timeliness and market analysis.

The mixed signals—strong headline growth versus modest underlying capital goods demand—suggest Q4 business equipment spending growth likely moderated from Q3's robust pace.