Orders at U.S. factories tumbled in July, dragged down by a sharp fall in orders for civilian aircraft.

The Commerce Department said Tuesday that factory orders declined 3.3 percent in July, after a 3.2 percent gain last month. July’s decline was mostly because of a 19.2 percent drop in orders in the volatile transportation equipment category. Orders for civilian aircraft — which can vary wildly from month to month — tumbled 70.8 percent in July after a 129.3 percent gain last month.

Excluding the transportation sector that includes aircraft, factory orders rose 0.5 percent in July after a tiny 0.1 percent uptick last month.

A category that serves as a proxy for business investment posted a solid 1 percent gain after a small 0.1 percent decline in June.

In recent months, U.S. manufacturing has been benefiting from a stronger dollar and an improving global economy. Growth has been picking up in Europe, Japan and parts of the developing world.

Despite the sharp fall in overall orders, the increase in the business investment category suggests companies are more optimistic about future demand from customers. A private survey last week showed that U.S. factories expanded at a brisk pace in August, another bright sign for the overall economy.

Orders for computers and electronic products rose 2.1 percent, and orders for electrical equipment, appliances and components rose 2.6 percent. Orders for autos and auto parts fell 0.9 percent.

Orders for durable goods — items meant to last at least three years — fell 6.8 percent after a 6.4 surge in June.

 
…