Demand for U.S. durable goods fell sharply during July in a broad-based decrease that marked the biggest drop in more than one year.

Orders for durable goods tumbled a seasonally adjusted 4.9% to US$204.71 billion last month after rising a downwardly revised 1.9% in June, the U.S. Commerce Department said Wednesday.

Today’s report also showed durable-goods orders rose by 7.3% in May and by 0.5% in April.

Orders for non-defense capital goods excluding aircraft – a key measure of business spending — fell 3.7% in July. Orders rose 4.8% in June.

The 4.9% decrease in overall durables was the biggest drop since a 5.7% skid in January 2004, and came even though an earlier indicator of the manufacturing sector turned higher.

The Institute for Supply Management’s index of manufacturing activity climbed to 56.6 in July from 53.8 in June and 51.4 in May. Readings above 50 point to expansion in activity.

Today’s durables report showed drops in nearly all categories of goods. Demand decreased in July for computers and electronics by 5.9%. Fabricated metals were down 4.4%, while machinery orders tumbled 6.2% and eased 2% for electrical equipment.

Transportation orders decreased by 8.6%, after dropping 1.6% in June. Demand for motor vehicles and parts rose 1.5% last month, but civilian plane orders plunged 20.2%, and orders for military aircraft fell by 5.0%. Excluding transportation, orders for other goods fell by 3.2% in July.

Capital goods orders decreased by 8.3% after rising 0.2% in June. Nondefense capital goods — items meant to last 10 years or more — fell by 7.3% last month.

Durable-goods inventories of manufacturers increased 0.6% last month. Unfilled orders rose 1.0%. Shipments dipped 0.1%.