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FACTORY ORDERS DECLINE .1%, ONLY THE 2ND DROP IN 9 MONTHS

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Orders to U.S. factories declined 0.1 percent in April, only the second drop in the past nine months, the government said Thursday.

The Commerce Department said the drop in the indicator of manufacturing plans, following a healthy increase in March, was led by declining orders for metals and transportation equipment.Orders had climbed 1.1 percent in March after dropping 0.3 percent in February during the severe winter.

Few analysts anticipated Thursday's drop. Most had predicted a modest increase.

Earlier Thursday the government reported that its main forecasting gauge of future economic activity was unchanged in April.

A series of reports this week, including today's data, points to slower economic growth in 1994 after a booming surge in the final three months of last year fueled by consumer spending.

Excluding the volatile transportation component, orders rose 0.1 percent in April. Excluding military orders, which surged in April, all orders were down 0.6 percent.

Orders for both durable and non-durable goods totaled a seasonally adjusted $274.4 billion, down from $274.7 billion in March.

Aside from April and February, orders have risen every month since a 1.9 percent decline last July.

The backlog of unfilled orders rose a mere 0.2 percent in April to $447.1 billion, the third increase in the past four months. The orders backlog is often seen as a measure of whether current facilities and manpower are able to keep up with demand.

Inventories in April increased 0.2 percent to $380.7 billion, after a 0.1 percent decrease in March.

Orders for durable goods, items expected to last more than three years, were down 0.1 percent to $146.8 billion, also the second drop in the last nine months.

Orders for non-durable goods such as food and fuel decreased 0.1 percent to $127.7 billion after five straight increases.