WASHINGTON – Orders to U.S. factories fell in July by the largest amount in 15 months, reflecting a big cutback in demand for commercial aircraft, the government reported Tuesday.
The Commerce Department (search) said that demand for manufactured products dipped 1.9 percent last month as orders in the transportation sector fell a sharp 8.8 percent. It was the biggest decline in this category in 19 months.
Analysts are concerned that manufacturing, which was the hardest hit sector in the last recession, could falter again if business and consumer confidence waivers in the face of soaring energy prices.
The report showed that overall orders dipped to a seasonally adjusted $387.8 billion in July, compared to $395.3 billion in June.
The biggest drop was an 8.8 percent fall in orders for transportation goods, which declined to $61.9 billion, down from $67.8 billion in July. The decline was led by a 20.1 percent fall in demand for commercial aircraft and parts, the second consecutive monthly decline in this category, and a 5.6 percent drop in demand for military aircraft and parts.
Orders for durable goods (search), items expected to last at least three years, were down 4.9 percent in July, unchanged from a preliminary reading last week. Orders for nondurable goods — products such as food, clothing and gasoline — actually rose by 1.7 percent in July after a 0.2 percent decline in June.