Assembly line robots weld the front cab of Chrysler's new 2009 Dodge Ram pickup in this Sept. 12, 2008, file photo, at the Warren Truck Plant in Warren, Mich. The government said Tuesday that factory orders dropped for the second straight month in September as businesses cut back on purchases of steel, computers and other equipment amid the economic downturn.

Washington, D.C. ? Factory orders dropped by more than three times as much as analysts expected in September as the U.S. manufacturing sector continues to suffer from the economic downturn.

The Commerce Department said Tuesday that factory orders fell by 2.5 percent from August, far more than the 0.8 percent drop expected by Wall Street economists surveyed by Thomson Reuters.

That’s on top of a revised 4.3 percent decline in August, which was the steepest in almost two years.

Excluding autos and aircraft, orders fell 3.7 percent, the steepest drop since 1992 when the department began tracking sector-specific changes.

Orders for nondefense capital goods excluding aircraft, considered a good indication of business investment plans, fell by 1.5 percent.

That follows a 2.3 percent drop in August and indicates companies are cutting back on investments, likely because of the economic downturn and difficulty getting credit.

Durable goods orders – big-ticket items such as construction machinery expected to last at least three years – rose by 0.9 percent, up from a preliminary estimate of 0.8 percent last week.

But that increase was overwhelmed by a 5.5 percent drop in orders of nondurable goods, which include food, clothes and petroleum products.

Orders for primary metals, including steel and aluminum, dropped by 4.6 percent, while orders for computers and electronic equipment declined by 1.8 percent.

The Commerce Department said last week that the economy contracted at an annual rate of 0.3 percent in the third quarter.

Businesses reduced their spending on equipment at a 5.5 percent pace, according to last week’s report.

The department said Tuesday that orders for autos and auto parts increased by 2.7 percent, after plummeting 10.6 percent in August.

Still, that increase is likely to be temporary as automakers had two disastrous months in September and October.

The reluctance of banks to lend has hurt automakers by making it difficult for potential buyers to get auto loans.

October sales sank 45 percent at General Motors Corp., 30 percent at Ford, 25 percent at Honda Motor Co. and 23 percent at Toyota, according to data released Monday.

Those results followed sales drops of more than 30 percent in September for Ford Motor Co., Toyota Motor Corp., Chrysler LLC and Nissan.

Meanwhile, a private trade group said Monday that its index of U.S. manufacturing activity fell sharply in October to its lowest level in 26 years.