Durable-Goods Orders Drop for 2nd Month

America's manufacturers saw demand for their products dip in May for the second straight month, a fresh sign of the industry's struggles to get back on sure footing.

The Commerce Department (search) reported Wednesday that orders to U.S. factories for durable goods — manufactured products such as cars and appliances expected to last at least three years — fell by 0.3 percent in May from the previous month. That followed a steeper decline of 2.4 percent from March to April.

May's performance was weaker than economists were forecasting. They were predicting durable goods orders to go up by a solid 1 percent.

The weakness in May was fairly broadbased, with orders for cars, computers and machinery all registering declines.

Manufacturing has been an Achilles heel in the national economy's ability to stage a full recovery. The sector has throttled back production and slashed payrolls in response to lackluster demand both at home and overseas, where countries are struggling with a global economic slump.

At the same time, manufacturers have to compete against a flood of imported goods flowing into the United States.

Recent reports on the manufacturing sector offer mixed signals on where the battered industry is heading.

Last week, the Federal Reserve (search) reported that big industry boosted production in May for the first time since February.

Production at the nation's factories, mines and utilities nudged up by 0.1 percent last month after dropping by a sharp 0.6 percent in both March and April, the Federal Reserve said last week in a report that economists had viewed as a sign that the industrial sector could be turning a corner.

In Wednesday's durable-goods report, orders for transportation equipment fell by 1.6 percent in May, after a 4.7 percent decline in April.

Excluding volatile transportation orders, which can swing widely from month to month, orders for other durable goods edged up by 0.2 percent in May, compared with a 1.5 percent drop in April.

Orders for automobiles inched down by 0.1 percent in May, following a 3.5 percent decline.

For computers, orders went down by 1.1 percent last month, compared with a 18.8 percent jump in April. Orders for communications equipment fell by 5.2 percent, the biggest drop since December. In April, such orders fell by 4.5 percent.

Orders for machinery dropped 0.9 percent in May, following a 5.3 percent decrease. Orders for electrical equipment and appliances went down 2.2 percent, after a 2.3 percent decline.

Primary metals, the category that includes steel, saw orders fall by 0.5 percent in May, compared with a 2.1 percent increase in April.

Shipments, a good barometer of current demand, also dipped by 0.3 percent in May, after a 1.1 percent decline in April.