Factory orders fell in December for a record fifth month in a row. With December's numbers now in the books, it is official that last year was the worst year for manufacturers since 2002.Going into today's announcement, everyone agreed that factory orders had probably dropped in December, but analysts were not expecting the decline to be as steep as the actual figures revealed. Analysts had estimated that we would see a 3% dip in factory orders for the month, but the actual numbers indicate a deeper 3.9% reduction during December.
For the full year 2008, factory orders actually rose slightly, but the 0.4% increase in the year was the worst year on record since back in 2002, as the recession put the brakes on spending. During 2002 factory orders actually shrank by 1.8%, and unless the current trend reverses itself soon, 2009 could be looking at a similar fate.
Analysts are definitely not expecting to see things start to turn around in the near term. With the recession still in full force, spending is not likely to pick up as soon as we would all like to see. In addition, the fact that the recession has moved onto a global scale is adding even further pressure on the struggling American manufacturing industry.
The pain is being felt by almost all industry's, with computers, autos, and heavy machinery being particularly hard hit.
As the situation continues to unfold, it will definitely lead to more and more layoffs. Unemployment is moving higher at an alarming rate and there are no signs yet that this is about to change. We got news today of higher than expected jobless claims, and for more on that, you can read what Joseph Lazzaro wrote about today's jobless claims report.
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