Orders to U.S. factories fell 0.8 percent in June, according to the Commerce Department, indicating a slowdown in manufacturing, which has been one of the strongest engines of economic recovery.
The department’s report followed Monday’s release of the Institute for Supply Management’s monthly manufacturing index, which fell to 50.9.
It’s the lowest reading on the index since July 2009. Readings above 50 signal expansion.
The Commerce Department said businesses cut back on orders for airplanes, autos and heavy machinery in June, lowering demand for factory goods for the second time in three months.
Orders for non-defense capital goods, a category that serves as a proxy for business investment plans, excluding aircraft, rose 0.4 percent in June. That represented an upward revision from last week’s estimate that this category fell 0.4 percent during that month.
The report also slightly revised its number on durable goods to a decline of 1.9 percent, slightly better than the 2.1 percent drop reported last week. Orders for nondurable goods showed no change from the previous month after a 0.5 percent drop in May.
Business demand for transportation equipment fell 8.6 percent, reflecting a 28.9 percent drop in orders for commercial aircraft and a 2.7 percent decline in orders for autos and auto parts. Automakers have been affected by supply chain disruptions following the March 11 earthquake and tsunami in Japan.
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