Business investment is slowing and U.S. machinery makers are suffering the brunt of the damage from slumping energy exploration, a stronger dollar and tepid overseas markets.

Bookings for non-military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, unexpectedly dropped 0.5 percent in March, a seventh consecutive decline, data from the Commerce Department showed Friday in Washington. Producers of machinery, including oil-drilling equipment and turbines, saw a 1.5 percent slump in demand.

Halliburton Co. is among those trimming investment after fuel prices plunged, while the appreciation in the dollar is making manufacturers less competitive in a weakened global market. Results from Google Inc., Microsoft Corp. and Amazon.com Inc. sent the Nasdaq Composite Index to a record, underscoring how technology companies are outshining heavy industry in driving the world’s largest economy.

“The point about the oil sector is that it’s not very big in terms of GDP, but it is very big in terms of capital spending,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd. in Newcastle, U.K. The hit to orders will probably continue through mid-year, even as business investment in non-energy areas “looks alright,” he said.

The Nasdaq Composite climbed 0.7 percent to 5,092.09 at the close in New York after sailing past its dot-com era peak for the first time on Thursday. Google said first-quarter advertising volume jumped, Amazon reported sales that were stronger than analysts projected and Microsoft reported quarterly profit that beat estimates.

Offsetting ‘Strength’

“We expect strength in the services sector to offset oil weakness,” Shepherdson said in a research note. That will be enough to keep the job market improving over the next few months, he said.

The Standard & Poor’s Supercomposite Machinery Index, which includes shares of Caterpillar Inc. and Cummins Inc., is down 1.8 percent this year compared with a 2.9 percent gain in the S&P 500.

The Commerce Department’s report showed demand for all durable goods -- items meant to last at least three years --rose 4 percent in March on aircraft and autos. That exceeded the median forecast of 83 economists surveyed by Bloomberg that projected a 0.6 percent increase.

Bloomberg Survey

Non-defense capital goods orders excluding planes were projected to rise 0.3 percent, according to the Bloomberg survey median. The February reading was revised to show a 2.2 percent slump, the biggest drop since July 2013. The decrease was twice as big as the 1.1 percent decline previously reported.

The seven-month losing streak matched an equally long string of declines that ended in September 2012, which was the longest in records dating back to 1992.

Shipments for non-defense capital goods excluding aircraft, used in calculating gross domestic product, decreased 0.4 percent in March after rising 0.1 percent, less than previously estimated.

The disappointing reading prompted economists to cut forecasts for first-quarter growth. Morgan Stanley’s tracking estimate declined to a 0.6 percent annualized rate from 0.9 percent. Gross domestic product expanded at a 2.4 percent pace in the last three months of 2014.

Growth Projections

Economists at JPMorgan Chase & Co. in New York went a step further, reducing their projection for the second quarter to 2.5 percent from 3 percent as the manufacturing headwinds “remain stiff,” Michael Feroli, the bank’s chief U.S. economist, wrote in a research note.

Bookings for machinery have slumped 12.6 percent in the last seven months --the biggest drop since the last recession ended in June 2009.

While a more detailed breakdown of the figures won’t be available until the report on factory orders due on May 4, February data issued last month showed the energy sector was among the weakest components.

The plunge in oil prices since mid-2014 has led to cutbacks in drilling. Halliburton, the world’s second-biggest provider of oilfield services, said it expects to reduce capital spending by 15 percent this year and accelerated the pace of job cuts ahead of its takeover of Baker Hughes Inc.

‘Competitive Market’

“Because of the lack of available work driven by the rig- count decline and the resulting over-capacity in available equipment chasing the work that remains, this is an extremely competitive market,” Jeff Miller, president of the Houston- based company, said on an earnings conference call on April 20. “Outside of North America, the international markets were more resilient than the domestic market but were not immune to the impacts of the lower commodity-price environment.”

The strength of the dollar has also been an issue for all manufacturers. Exports have fallen four months in a row as the greenback climbed more than 20 percent since the end of June and growth overseas remains uneven.

That’s one reason some economists say the slowdown in manufacturing goes beyond the slump in oil.

Orders “looked to me like they were pretty uniformly weak outside of transportation,” said Aneta Markowska, chief U.S. economist at Societe Generale in New York. “The dollar strength is also playing a role there.”

The auto industry remained a bright spot last month, with orders for vehicles and parts climbing 5.4 percent, the most since July.