WASHINGTON – New orders for long-lasting U.S.-made goods plunged unexpectedly by 2.8 percent in March, the biggest drop since September 2002, as orders for aircraft fell sharply, the government said on Wednesday.
Excluding the volatile transportation category, orders for durable goods (search) — pricey manufactured items meant to last three years or more — sank 1.0 percent, the Commerce Department (search) said.
Revisions moved the previous months' reading lower as well. Commerce adjusted the February durable goods orders down to a 0.2 percent decline from a 0.5 percent increase, and revised the durable goods orders ex-transportation lower to a 0.2 percent drop from unchanged.
The report offered a generally gloomy picture for factory and business spending plans. Wall Street economists had expected durable goods orders to climb 0.3 percent overall and 0.5 percent excluding transportation.
The total level of new orders was at its lowest since June 2004. Durable goods orders excluding defense fell 3 percent, the biggest drop since September 2002.
Civilian aircraft orders slumped 22.7 percent last month after a big rise in February, and defense aircraft orders plummeted 35 percent.
The report suggested businesses were scaling back spending plans last month as orders for non-defense capital goods, excluding aircraft, dropped 4.7 percent. That decline follows a 2.5 percent slide in February.
Demand for machinery dropped 7.6 percent, orders for fabricated metal products fell 0.1 percent.
Meanwhile communications equipment orders rose 5.1 percent and orders for primary metals climbed 1.0 percent.