U.S. Durable Goods orders dropped 2% in June, more-than-expected, highlighting the ongoing slump in demand and economic growth. Excluding the volatile transportation equipment component, the decline was 1.5%.

“Behind the scenes, however, a split is beginning to appear, with basic industry on the mend while the technology segments worsen,” says BMO Nesbitt Burns. “Metals makers are beginning to see light at the end of the tunnel, and basic machinery categories have improved. However, the quarterly rates of decline in computers, communications gear, and semiconductors have been awesome.”

Capital goods orders are the economy’s weakest demand sector, plunging at a 41.7% annual rate. “[This is] far outpacing the drop in shipments, which augurs poorly for summertime production and employment in the industry.”

BMO Nesbitt Burns suggests that the numbers indicate that the tech slowdown may continue for a while. “You could argue that this report is merely a restatement of the universal earnings disappointments and downward guidance we’ve been receiving from technology companies lately. Still, since orders lead production and shipments by a few months, there’s no question that slow growth is the best we can hope for during the second half of the year.”