Orders to U.S. factories plunged in October by the sharpest amount in over eight years as a deepening recession caused big cutbacks in...

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WASHINGTON — Orders to U.S. factories plunged in October by the sharpest amount in over eight years as a deepening recession caused big cutbacks in demand for steel, autos, computers and heavy machinery. Analysts expect the weakness will continue for some time.

The Commerce Department reported Thursday that factory orders dropped 5.1 percent in October, the largest decrease since an 8.5 percent fall in July 2000.

It was larger than the 4 percent drop that economists had been expecting. They believe manufacturing will continue to be under pressure for many more months, reflecting a deepening recession that already is the longest slump in a quarter-century.

The drop in orders marked the third consecutive decline with demand for both durable goods and nondurable goods falling.

Demand for non-defense capital goods, considered a good proxy for business investment plans, fell by 5 percent in October, the biggest decline since January and the fourth straight monthly decrease. With the economy weakening, businesses are cutting back on their plans to expand and modernize, adding another drag to overall growth.

Orders for durable goods, items expected to last at least three years, fell by 6.9 percent, even bigger than the 6.2 percent initial estimate the department made last week.

Orders for nondurable goods, such as food, clothing, paper goods and petroleum products, dropped by 3.4 percent, partially reflecting the big declines occurring in energy prices.

The weakness was led by a big 11.2 percent fall in demand for transportation equipment. Demand for autos fell by 2.8 percent and commercial aircraft orders were down by 4.8 percent.

The auto companies have been in a prolonged slide, reflecting not only the weak economy but the huge jump in gasoline prices earlier in the year. Even though gas prices have retreated from their highs above $4 per gallon this summer, car sales have remained depressed, reflecting rising unemployment and the severe credit crisis which hit in September, making it harder to get auto loans.

U.S. auto sales plunged by 37 percent in November to their worst level in more than 26 years, adding more ammunition to Detroit automakers’ case for a congressional lifeline that they are pressing again for Thursday on Capitol Hill.

Every major automaker reported a year-over-year sales decline of more than 30 percent on Tuesday with the Detroit carmakers among the worst hit. Sales at General Motors Corp. fell by 41 percent, Chrysler LLC’s sales dropped by 47 percent and Ford Motor Co. saw a 31 percent drop.

Excluding transportation, factory orders would have been down by 4.2 percent in October, indicating that the weakness in manufacturing is widespread.

Orders for primary metals such as iron and steel plunged by 23.1 percent in October while demand for machinery was down by 9 percent. Construction machinery was off 25.6 percent, reflecting the hard times in the building industry which is suffering through the biggest slump in home construction in decades.

Demand for computers and other electronic products fell 3.4 percent in October, while furniture makers reported a 5 percent drop in demand.

All of the weakness is causing a rising number of layoffs. Dallas-based AT&T Inc. said Thursday it is cutting 12,000 jobs, or about 4 percent of its work force, because of the economic downturn, while Wilmington, Del.-based chemical giant DuPont said it would cut 2,500 jobs.