New orders for U.S.-made goods increased more than expected in January, pointing to continued strength in manufacturing despite supply challenges.

The Commerce Department said on Thursday that factory orders rose 1.4% in January. Data for December was revised sharply higher to show orders gaining 0.7% instead of falling 0.4% as previously reported. Economists polled by Reuters had forecast factory orders would rebound 0.7%.

Manufacturing, which accounts for 11.9% of the economy, is being underpinned by businesses rebuilding inventories, though tight supply chains remain a constraint.

Supply bottlenecks could worsen after the Russian invasion of Ukraine. Russia and Ukraine are producers of key materials used to manufacture semiconductors, whose scarcity around the global is hampering motor vehicle production.

In January, there were increases in orders for machinery and transportation equipment. Orders for computers and electronic products were unchanged. Orders for electrical equipment, appliances and components fell.

Shipments of manufactured goods increased 1.2% in January after rising 0.7% in December. Inventories at factories increased 0.7%. Unfilled orders rose 0.9% after advancing 0.8% in the prior month.

The Commerce Department also reported that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 1.0% in January instead of 0.9% as reported last month.

Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased at an unrevised 1.9% rate in January.