Demand For Chips Fuels Rise In Orders

Orders to American factories for big-ticket durable goods rebounded strongly in July, powered by a surge in demand for semiconductors and other electronic components.

The unexpected 2.4 percent increase, to a seasonally adjusted $187.5 billion, came despite the economic slump in Asia and the General Motors strikes, which were settled late in the month.

The largest rise in eight months, it followed a modest 0.2 percent increase in June and a 3.3 percent decline in May, the Commerce Department said Wednesday.

Factories are caught in an economic tug of war between strong consumer demand in the United States and a waning appetite for U.S. goods in Asia. Through much of the year, Asia has been a dominating influence. But in July, domestic demand appeared to win out.

“It may be a bit premature to write off manufacturing,” said economist Veronika White of First Union Corp. in Philadelphia. “Strength in private domestic demand seems to be offsetting a good chunk of the declines in manufactured goods for export.”