WASHINGTON (Oct 2): New orders for US factory goods barely rose in August as strong demand for electrical equipment, appliances and components was offset by weakness in commercial aircraft orders.

Factory orders edged up 0.1% after a downwardly revised 0.8% jump in July, the Commerce Department's Census Bureau said on Friday. Economists polled by Reuters had forecast orders gaining 0.1% after a previously reported 0.9% rise in July.

Orders increased 6.8% on a year-over-year basis in August.

An AI infrastructure buildout is supporting manufacturing as well as businesses rebuilding inventories to meet robust domestic demand. There are, however, concerns that segments not related to the AI spending boom could struggle in the months ahead amid headwinds from the US-Israeli war with Iran, which has snarled supply chains and raised energy prices.

Diesel prices are at record highs, and economists say the economy could soon feel the effects. Ongoing tariffs on imports also pose a downside risk. An Institute for Supply Management survey on Thursday showed rising anxiety among manufacturers over the trade war with Canada.

Factory orders in August were restrained by a 4.3% drop in orders for civilian aircraft and parts. Orders for motor vehicle bodies, parts and trailers rose 0.8%. Machinery orders soared 1.1%. Orders for computers and electronic products were unchanged, but were up 14.7% year over year. Orders for electrical equipment, appliances and components surged 1.1%.

The Census Bureau also reported that orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, accelerated 1.6% in August as reported last month. Shipments of these so-called core capital goods rose 0.5% instead of the initially estimated 0.6%.

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