Factory orders rebound in may, aboard shipments up (Reuters)

WASHINGTON (Reuters)-new orders received from factories bounced back in may, boosted by demand for transport and a range of other products, which points to the underlying strength in the manufacturing sector.

The Commerce Department said Tuesday the orders for manufactured goods rose 0.8 percent after the fall of 0.9 per cent in April. Economists had forecast factory orders rebounding 1.0 per cent in May.

Production is leading the economic recovery, with data on Friday, showing a pick-up in the industry as the Institute for Supply Management manufacturing rose to 53.5 from 55.3 in June in the month of May.

Details of the report may factory orders suggested an easing in supply chain disruptions after the earthquake of March in Japan that had hindered the activities of the factory.

The Commerce Department report showed orders excluding transportation with edged 0.2 percent in may after a similar gain in the previous month.

Orders to U.S. factories vacancies rose 0.9 percent in may, the biggest increase since September, after a gain of 0.6 per cent in April. Shipments edged 0.1 percent after falling 0.4 percent in April.

U.S. inventories at factories rose 0.8 percent in May to 593.0 billion, the highest level since the series began in 1992.

The Department revised durable goods orders for may show a larger increase of 2.1 percent, rather than the increase of 1.9 percent previously reported. Excluding transportation, durable goods orders were up 0.7 percent in the month of may instead of 0.6 percent.

Orders for non-capital goods excluding aircraft defense, seen as a measure of business confidence, the increase has been verified to 1.6 percent.

(Reporting by Lucia Mutikani, Editing by Chizu Nomiyama)

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