WASHINGTON (Reuters] – March saw more U.S.-made goods orders than was expected. Shipments rose strongly as well. But, China’s new COVID-19 restrictions could cause supply issues that will slow down manufacturing activity for the next few months.

After a 0.1% increase in February, Tuesday’s Commerce Department announcement stated that factory orders increased 2.2% in March. Reuters polled economic experts to predict that factory orders would increase 1.1%.

China’s Zero-Tolerance COVID-19 Policy, which causes disruptions in supply chains, is creating headwinds for U.S. Manufacturing.

On Monday, a survey by the Institute for Supply Management showed that the Institute for Supply Management’s April national factory activity index dropped for the second month straight. According to the ISM, some manufacturing companies are concerned about their Asian counterparts’ reliability in delivering during summer months.

There was an overall increase in factory orders for March. The global increase in semiconductor supply was evident by the 3.0% rebound in motor vehicle and part orders. Last month, the Federal Reserve reported that motor vehicle assembly orders rose to a record 14-month high.

The orders for machines, machinery, and parts of electrical and primary metal equipment, as well as appliances and component, increased. The orders for computer and electronic products also increased, as well as those for fabricated metal product.

After rising 1.1% in February, manufactured goods shipped increased by 2.3%. The factories saw an increase in inventories of 1.3%. After climbing 0.5% the previous month, unfilled orders rose 0.4%.

Commerce Department reported that the Commerce Department’s orders for nondefense capital goods (excluding aircraft) increased 1.3% to 1.0%.

These so-called core goods are used for business equipment expenditure calculations in the Gross Domestic Product report. They rose 0.4% instead of 0.2% in March.

Strong domestic spending from businesses on equipment contributed to a strong quarter despite a contraction in GDP of 1.4% over the same period.