A boost in orders for airplanes and machinery translated into a better-than-expected 1.8 percent increase in durable goods orders in May, the U.S. Commerce Department said today.

A narrower gauge of business investment marked its largest improvement in more than four years, MarketWatch reported.

Orders for durable goods increased for the third time in the last four months. Despite the recent increases, however, the level of new orders in May was down 5.1 percent from December. Orders are down 26.8 percent in the first five months of the year compared with the same period a year ago.

The May increase was identical to the gain in April. Economists surveyed by MarketWatch were forecasting a 0.5 percent decline, expecting weakness in the auto sector to prevail over modest improvements in other industries.

Most sectors reported better bookings in May compared with April. Civilian aircraft orders soared 68 percent, machinery orders rose 7.7 percent and computer orders jumped 9.8 percent.

Declining orders were seen in fabricated metals, motor vehicles and electrical equipment. The monthly durable goods report is hugely volatile, in large part because of swings in demand for civilian aircraft and other extremely expensive items.

The report indicates that the severe decline in manufacturing output in the first quarter moderated, as businesses and consumers regained some appetite for big-ticket items such as airplanes and refrigerators.

The new orders component of the Institute for Supply Management index rose into positive territory in May for the first time in more than a year. However, industrial production declined 1.1 percent in May and manufacturing output fell 1 percent.