Orders placed with U.S. factories for durable goods rose in March, pointing to sustained investment in business equipment that is helping drive economic growth.

Bookings for durable goods—items meant to last at least three years—increased 0.8% in March after a revised 1.7% decline a month earlier, Commerce Department figures showed Tuesday. The figures aren’t adjusted for inflation.

The value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, rose by a larger-than-forecast 1%.

The median estimates in a Bloomberg survey of economists called for a 1% increase in all durable goods and a 0.5% gain in the core figure. Stocks fell in early trading as investors monitor corporate earnings, and the yield on the 10-year Treasury note declined. 

The figures suggest sustained momentum in capital expenditures as the first quarter drew to a close. Companies are striving to enhance productivity against a backdrop of higher energy costs, shifts in supply chains and difficulty attracting skilled labor.

“The solid increase in core orders suggests that businesses remain in good shape, and are still looking to bulk up machines and equipment to contribute to their bottom lines,” Jennifer Lee, senior economist at BMO Capital Markets, said in a note.

At the same time, Russia’s war in Ukraine, rising borrowing costs as the Federal Reserve tightens monetary policy, and concerns about a slowdown in demand are introducing more economic uncertainty.

Core capital goods shipments, a figure that is used to help calculate equipment investment in the government’s gross domestic product report, rose 0.2% in March for a second month.

First-quarter GDP figures will be released Thursday. Prior to the durables report, the Atlanta Fed’s GDPNow estimate shows business investment probably increased at a solid pace during the period.

Broad Advance

The broad-based gain in durable goods included stronger bookings for communications equipment, motor vehicles, machinery and electrical equipment.

Bookings for motor vehicles increased 5% after a 0.3% in the prior month. Durable goods orders excluding transportation equipment increased 1.1%.

Meantime, bookings for commercial aircraft declined 0.9%, the government’s data showed. Boeing Co. reported 53 orders in March, up from 37 a month earlier. Still, aircraft orders are volatile and the government data don’t always correlate with the company’s figures.

The report also showed unfilled orders for all durable goods rose 0.4%, led by transportation equipment. Inventories climbed 0.7%.