THE ECONOMY

U.S. factories saw a hefty increase in their orders for big-ticket products in July, reflecting continued strength in export sales and a boost to business investment from the government’s tax stimulus package.

Economists, however, remain worried that spreading economic weakness overseas and a rebound in the value of the dollar could spell an end to the export boom later this year.

The Commerce Department said Wednesday that orders for durable goods rose 1.3 percent last month, far above the 0.1 percent increase Wall Street had been expecting.

Highlights:

•The July increase matched a 1.3 percent rise in June, which was revised up from an earlier reading of 0.8 percent.

•Even outside the volatile aircraft category there was widespread growth, indicating that American companies are continuing to benefit from a boom in exports mainly caused by the decline in the value of the dollar earlier this year.

•Some economists expressed concerns over how much longer the export boom can last, given spreading economic weakness in Europe, Japan and other major overseas markets.

•A huge rebound in orders for commercial aircraft led last month’s strength. Demand for commercial aircraft shot up 28 percent in July. The one-month surge followed a 21.3 percent decline in June in what is a volatile category.

•Orders for motor vehicles rose by 1.2 percent in July. While it was the second straight monthly increase, it mainly reflected a rebound following curtailed activity related to a strike at an auto parts supplier.

•Auto sales fell in July to the slowest pace in 16 years with General Motors Corp. reporting a drop of 26 percent compared to July 2007, while Ford Motor Co. experienced a 15 percent decline.

•Strength outside of transportation reflected strong gains in such categories as primary metals, including steel, and machinery, both areas that have been helped by overseas demand.

Associated Press