November 3, 2004 12:00 PM, EST

Factory Orders Decline for Second Straight Month

Orders Excluding Transportation Rise 1.2%

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ew orders at U.S. factories dropped 0.4% in September, while orders excluding transportation equipment rose 0.3%, the Commerce Department reported Wednesday.

The decline in orders to $368.3 billion followed a revised 0.3% drop in September, Commerce said. This was the first back-to-back declines since November-December 2002.

Falling orders translate to less demand for trucking services because factories use trucks to ship raw materials and finished products.

However, through September, factory orders were up 11.6% for the year compared with the same period in 2003, Commerce said.

Orders for non-defense capital goods excluding aircraft, a signal of future business investment, rose 2.8% in September after rising 0.7% the month before.

Bookings for products other than transportation equipment rose 0.3% in September after rising 1.2% in August.

Commerce said orders for transportation equipment fell 3.9% in September after falling 8.3% in August.