New orders for U.S. factory goods rose in April, but not enough to reverse the prior month's plunge, adding to signs of a slowdown in manufacturing activity.
The Commerce Department on Wednesday said new orders for manufactured goods increased 1%. March's orders were revised to show a 4.7 % decline instead of the previously reported 4.9% tumble.
Economists polled by Reuters had forecast orders received by factories rising 1.5%.
Manufacturing has been hit by a combination of deep government spending cuts and slowing global demand, especially in China and the recession-hit Europe.
Data on Monday showed a gauge of national factory activity contracted in May for the first time in six months, dragged down by declining orders.
This suggests the weakness in factory activity, also highlighted by a drop in industrial production in April, will probably persist for some time.
The Commerce Department report showed factory orders were lifted by an 8.4% jump in transportation equipment on the back of strong orders for automobiles, and civilian and defense
Orders excluding the volatile transportation category slipped 0.1% after falling 2.8% in March.
Outside transportation there were gains in orders for machinery, computer and electronic products, primary metals and electrical equipment, appliances and components.
Unfilled orders for manufactured goods rose 0.3% and were up 0.8% excluding aircraft, a positive sign for factories. Shipments fell for second straight month.
Stocks of unsold factory goods edged up 0.2%, showing no sign inventories are piling up, which should help the sector in the long-run. Factory inventories account for more than a third of business inventories.
The inventories-to-shipments ratio was 1.31, the highest since June 2012, and up from 1.30 in March. The unfilled orders-to-shipments ratio increased to 6.26 from 6.21.
The Commerce Department also said orders for durable goods, manufactured products expected to last three years or more, rose 3.5% instead of the 3.3% increase reported last week.
Durable goods orders excluding transportation were up 1.5% rather than 1.3%.
Orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans - increased 1.25 as previously reported.