New orders for key U.S.-made capital goods rose sharply in June despite supply constraints hampering production at some factories, suggesting that business spending on equipment could remain strong beyond the second quarter.

Orders for non-military non-aircraft capital goods, an indicator of closely watched corporate spending plans, rose 0.5% last month, the Commerce Department said on Tuesday. These so-called basic capital goods orders gained 0.5% in May.

Economists polled by Reuters were forecasting an average increase of 0.7% in orders for basic capital goods.

US stock index futures fell after the data. The dollar slipped against a basket of currencies. US Treasury prices were higher.

Business investment in equipment has exploded during the Covid-19 pandemic, supporting the manufacturing sector, which accounts for 11.9% of the US economy. Meanwhile, consumer spending has shifted towards goods of services, with millions of Americans locked in their homes.

Record interest rates and massive fiscal stimulus provided new impetus, leading to supply constraints.

Although demand is returning for services, with just under half of the population fully vaccinated against the coronavirus, spending on goods is expected to remain high.

Households have accumulated at least $ 2.5 trillion in excess savings during the pandemic and inventories are low, which will likely see companies continue to invest in equipment to increase production.

Orders for basic capital goods were buoyed last month by primary machinery and metal products, as well as computers and electronics. Orders for electrical equipment, devices and components remained unchanged.

Shipments of basic capital goods rose 0.6% after accelerating 0.9% in May. Basic capital goods shipments are used to calculate capital expenditure in the government’s gross domestic product measure.

Business capital spending posted three consecutive quarters of double-digit growth. Another solid quarter of growth is expected when the government releases its anticipated estimate of GDP growth for the second quarter on Thursday.

According to a Reuters survey of economists, GDP growth likely grew at an annualized rate of 8.6% in the last quarter, an acceleration from the 6.4% pace in the first quarter. Expected second quarter growth would be the fastest since 1983 and could peak in the current cycle.

Orders for durable goods, or items ranging from toasters to planes expected to last three years or more, advanced 0.8% in June after rebounding 3.2% in May. They were supported by a 2.1% increase in orders for transport equipment.

Orders for civilian aircraft increased 17.0%. Boeing said on its website that it had received 219 aircraft orders last month, including 200 for the United Airlines 737 Max jet. This compares to 73 aircraft orders in May.

Orders for motor vehicles and parts fell 0.3% after increasing 2.0% in May. Motor vehicle production has been hit by a global shortage of semiconductor chips. The production of computers and electronic products was also affected.

Unfilled durable goods orders rose 0.9% in June after rising 1.0% in May.