NEW orders for U.S. factory goods recorded their biggest increase in eight months in March, boosted by demand for transportation equipment, but the underlying trend remained weak against the backdrop of a strong dollar.

    The report Tuesday from the Commerce Department was the latest indication that the rebound from the first quarter’s abrupt slowdown would not be as strong as experienced during the same period last year when output was chilled by cold weather.

    “It was a difficult winter for manufacturers and it appears they are still hurting after the strong run in the dollar late last year,” said Chris Low, chief economist at FTN Financial in New York.

    New orders for manufactured goods increased 2.1 percent, the largest gain since July last year, after dipping 0.1 percent in February. It was the first rise since last August and was buoyed by a 13.5 percent jump in orders for transportation equipment.

    Orders excluding transportation were flat in March. February’s 0.1 percent gain in orders for manufactured goods outside transportation was the first rise since June.

    The dollar rose against a basket of currencies while prices for U.S. Treasury debt fell. Stocks on Wall Street were trading higher, with healthcare shares leading the way.

    Manufacturing, which accounts for about 12 percent of the U.S. economy, has been hit by the strong dollar and lower crude oil prices, which are putting a squeeze on the profits of multinational corporations and oil firms.

    That, together with harsh weather and a now-settled labor dispute at the West Coast ports, helped to hold the economy down to a 0.2 percent annual growth pace in the first quarter.

    (SD-Agencies)