(AP):

Orders to United States factories for big-ticket manufactured goods posted a disappointing increase in February that raised new worries about the strength of the economy.

Demand for durable goods increased by 2.5 per cent in February, the U.S. Commerce Department reported. It was a weaker-than-expected rebound from a huge 9.3 per cent drop in orders that occurred in January.

That January decline jolted financial markets around the world and contributed to a 416-point drop in the Dow Jones industrial average on February 27 as investors grew more worried about a possible recession this year.

In the new reports, analysts were especially concerned about continued weakness in business investment, which fell by 1.2 per cent in February, the fourth decline in the past five months.

This category, which covers non-defense capital goods excluding aircraft, is viewed as a proxy for business plans to expand and modernise.

If business spending falters significantly, it could raise the risk of a recession in an economy already struggling from a sharp slowdown in housing.

Stephen Stanley, chief economist at RBS Greenwich Capital, said he had trimmed his estimate for economic growth in the current January-March quarter to 2.2 per cent, matching the lacklustre performance of the final three months of last year.

He called the weakness in business investment "puzzling" and said it may have been influenced by winter storms last month.

But other analysts said it could be an indication that businesses are cutting back on plans to expand and modernise in the face of an economic slowdown that has now lasted 12 months.