WASHINGTON, (Reuters) – New orders for U.S.-made goods fell modestly in February and shipments rose after four straight monthly declines, but the manufacturing sector is slowing amid rising inventories.

Factory goods orders dropped 0.5 percent, the Commerce Department said on Monday, pulled down by weak orders for machinery, transportation equipment and computers and electronic products. Data for January was revised down to show factory orders unchanged instead of edging up 0.1 percent as previously reported.

Economists polled by Reuters had forecast factory orders falling 0.6 percent in February. Factory orders rose 2.4 percent compared to February 2018. The release of the report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25.

Manufacturing, which accounts for about 12 percent of the economy, is losing momentum as the stimulus from last year’s $1.5 trillion tax cut package fades. Activity is also being hampered by a trade war between the United States and China as well as by last year’s surge in the dollar and softening global economic growth, which are hurting exports.

While a survey last week showed a measure of national manufacturing rebounded from a more than two-year low in March, factory payrolls fell for the first since July 2017. Job losses were mostly concentrated in the automotive sector, where slowing sales that have led to an inventory bloat.

Shipments of factory goods rose 0.4 percent in February after dropping 0.3 percent in January. They had declined for four straight months. With unfilled orders falling 0.3 percent and inventories rising 0.3 percent in February, factory orders are likely to remain sluggish.

In February, orders for machinery fell 0.6 percent after rising 2.1 percent in the prior month. Orders for industrial machinery declined 2.6 percent after surging 15.5 percent in January. Orders for electrical equipment, appliances and components rose 1.0 percent after increasing 1.1 percent in January. Computers and electronic products orders fell 0.5 percent after dropping 1.9 percent in January.

Transportation equipment orders tumbled 4.5 percent in January after gaining 0.4 percent in the prior month. Orders for civilian aircraft and parts plunged 31.1 percent. Motor vehicles and parts orders gained 0.5 percent.

The Commerce Department also said February orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, slipped 0.1 percent as reported last week. Orders for these so-called core capital goods rose 0.9 percent in January.

Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, dipped 0.1 percent in February rather than being unchanged as previously reported. Core capital goods shipments surged 1.0 percent in January.

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