Durable goods orders fall 2.4 percent

WASHINGTON, May 28 (UPI) -- The Commerce Department said Wednesday that new orders for big-ticket items dropped 2.4 percent to $168.93 billion in April -- the largest decline since last September.

The government revised its March new order figure to a gain of 1.4 percent. It originally reported the March increase as 1.5 percent.

Economists on Wall Street were expecting orders for durable goods -- items meant to last three years or longer -- to decline 1 percent during the month.

Analysts said the report added to worries that the manufacturing sector of the economy continues to struggle.

Another report that has indicated the manufacturing sector has slowed included the April index of manufacturing activity from the Institute for Supply Management, which came in at 45.4 -- its second consecutive month the index has come in below 50. Readings below 50 indicate contraction in the manufacturing sector.

Durable goods orders reflect the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods.

The latest report from the Commerce Department showed the decline was fairly broad-based with drops in all categories except primary metals, civilian aircraft orders and computers and related products, which jumped 15.3 percent. Orders for the broader category of computers and electronic products was unchanged for the month.

The report showed transportation orders fell by 5.4 percent, pulled down by a 3 percent decline in orders for cars and parts. Civilian aircraft orders, however, surged 48.6 percent. If transportation orders were excluded, durable-goods orders would have fallen 1.2 percent for the month.

The government agency said defense capital goods orders fell by 19.4 percent in April. If defense orders were excluded from overall durable-goods orders, orders would have declined 1.5 percent. Defense aircraft orders were down by 26.4 percent.

The report also showed orders for non-defense capital goods, which are items meant to last 10 years or more, fell by 3 percent, if orders for aircraft are excluded.

Durable-goods inventories fell by 0.1 percent for the month and have been down for 25 of the last 26 months. Unfilled orders fell by 0.3 percent, while durable-goods shipments fell by 0.7 percent.

The Commerce Department also announced that it will start publishing some semiconductor data staring with the July durable-goods report. The semiconductor industry stopped providing data to the government more than a year ago.

However, the government agency said the only published semiconductor information will be on shipments, not orders. Semiconductors will also be included as part of a broader inventory figure but separate inventory data for semiconductors won't be provided.