U.S. factory orders took a big slide in January, while the services sector performed better than expected in February.

Orders for manufactured goods decreased 2.5%, following a revised 2.0% climb in December, the U.S. Commerce Department said today. Originally, factory orders were seen 2.3% higher in December. Economists forecast factory goods orders 2.5% lower in January.

Demand for durable goods, expensive things designed to last at least three years, decreased in January, down a revised 5.1%. Last week, Commerce, in an early estimate, said durables in January fell 5.3%.

Separately, the Institute for Supply Management’s nonmanufacturing index, which measures performance of the services sector, for February registered a reading of 49.3, higher than the expected 46.5.

Meanwhile, U.S. productivity held up strong at the end of 2007 despite a sharp slowdown in output, suggesting firms are adjusting to the weaker economy.

Nonfarm business productivity increased at a 1.9% annualized rate from October to December, the U.S. Labour Department said Wednesday, up slightly from the previous estimate of a 1.8% rise. It had gone up 6.3% in the third quarter, which was also revised up.

Wall Street economists had expected no revision to the fourth-quarter data as gross domestic product growth, a key ingredient to productivity, was previously reported to have been unrevised at 0.6%.