New orders for U.S. factory goods in March recorded their biggest decline in three years as demand for transportation equipment and a range of other goods slumped, according to new government data, Reuters reported.

The Commerce Department said orders for manufactured goods dropped 1.5 percent, after a revised 1.1 percent rise in February. Economists had forecast orders falling 1.6 percent after a previously reported 1.3 percent increase in February.

The Commerce Department report showed that orders for transportation equipment tumbled 12.6 percent in March on weak orders for civilian aircraft. Orders for motor vehicles and parts were flat in March after rising 1 percent in February.

Auto sales surged early in the year, reflecting pent-up demand from households after a devastating earthquake and tsunami in Japan caused disruptions to auto production in 2011 and left dealers without models that consumers wanted to buy.

Industry data released on Tuesday showed that motor vehicle sales increased to an annual rate of 14.4 million units in April after setting a 14.3 million unit pace in March, suggesting fundamental strength in the sector.

Factory goods orders excluding transportation were flat in March after rising 1 percent the prior month.

Unfilled orders at U.S. factories edged up 0.1 percent, after rising 1.2 percent in February. Shipments of factory goods increased 0.7 percent after rising 0.1 percent the prior month, while inventories increased 0.3 percent.