Factory Orders in July Hit Seven-Month Low : Economy: The 1.1% drop indicates a sluggishness that analysts now say can’t be overcome until early next year, too late for incumbents such as President Bush.

Orders to U.S. factories in July recorded their worst decline in seven months, the government said Wednesday, underscoring pre-election concern about the wobbly economy.

Orders fell 1.1% to $241.8 billion after a 2.4% gain in June. It was the second decline in three months and the worst since a 3.7% drop in December. Analysts were anticipating a slightly bigger decrease.

Early in the year, economists had been counting on factory production, particularly of “big-ticket” durable goods ranging from airplanes to home appliances, to help lift the economy from stagnation.

However, the hoped-for pickup has not arrived. Analysts now say the earliest the economy can shed its sluggishness is early next year, too late for incumbent officeholders such as President Bush, who face restive voters Nov. 3.

In another warning sign, today’s report said the backlog of unfilled orders fell 1.3% to $484.3 billion, the lowest level since February, 1989. It was the 11th consecutive decrease and an indication of possible production cutbacks and layoffs ahead.

The dwindling backlog shows that the current manufacturing work force is having little difficulty keeping up with new orders.

However, some economists believe that part of the decline can be attributed to a shift away from production of military equipment, which takes longer to make than most other goods.

In July, orders for durable goods declined 3.2% to $119.3 billion. That marks a revision from the 3.4% drop estimated last week. The worst declines came in engines and turbines, down 20.3%; aircraft, down 36.3%, and military goods, down 27.4%.

There also were drops in steel, engines and turbines and construction and mining equipment. Orders for communications equipment and stone and glass products rose.

Non-durable goods orders rose 0.9% to $122.5 billion, the sixth increase in a row. The gain was led by printing and publishing and food. There were declines in orders for leather and tobacco products.

Excluding transportation equipment, orders were up 0.9% in July. Excluding military goods, they fell 0.4%. Shipments from factories, a measure of current production, rose 0.4% to a seasonally adjusted $248.3 billion, the sixth increase in seven months.

Inventories were virtually unchanged at a seasonally adjusted $383 billion.

Factory Orders

Total new orders in billions of dollars, seasonally adjusted

July, ‘92: 241.8

June, ‘92: 244.5

July, ‘91: 244.6

Source: Commerce Department