By Christopher S. Rugaber
AP Economics Writer
WASHINGTON (AP) -- Orders for long-lasting factory goods fell by the largest amount in three years last month, mostly because demand for commercial aircraft plummeted. But companies also ordered less machinery and other equipment, a sign manufacturing output may slow.
Orders for durable goods dropped 4.2 percent in March, the steepest fall since January 2009, the Commerce Department said Wednesday. Commercial aircraft orders, a volatile category, fell by nearly 50 percent.
Excluding transportation equipment, orders declined 1.1 percent. That's the second drop in that category in three months.
And orders for so-called "core" capital goods, a good measure of business investment plans, declined 0.8 percent. Companies cut their orders for steel and other metals, industrial machinery and computers.
Shipments of durable goods increased last month, which adds to growth in the first three months of the year. The government will report on the economy's first quarter growth Friday.
But the decline in orders indicates that growth may slow in the months ahead, economists said.
"This was a weak report," said Ellen Zentner, senior economist at Nomura Securities. It "certainly points to slowing business investment as we enter the second quarter."
A durable good is expected to last at least three years. Examples range from appliances and cars to heavy machinery and planes.
Americans are still spending, despite recent increases in gas prices. Retail sales rose at a healthy pace in March, the government said last week, boosted in part by unseasonably warm weather.
More consumer spending is aiding the economy, which expanded at a 3 percent annual pace in the final three months of last year.
Published: Thu, Apr 26, 2012
