WASHINGTON (Reuters) - New orders for U.S.-made goods increased more than expected in October and business investment on capital was a bit stronger than initially thought as the manufacturing sector continues its steady recovery from the pandemic. The Commerce Department said on Friday that factory orders rose 1.0% after increasing 1.3% in October. Economists polled by Reuters had forecast factory orders increasing 0.8% in October. Manufacturing, which accounts for 11.3% of the U.S. economy, is being supported by a shift in demand towards goods from services because of the COVID-19 pandemic. But there are clouds gathering for the sector. The Institute for Supply Management (ISM) reported this week that its index of national factory activity dropped in November because of the coronavirus. The Commerce Department also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.8% in October instead of 0.7% as reported last month. Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, accelerated 2.4%. They were previously reported to have jumped 2.3%. Business spending on equipment rebounded in the third quarter, ending five straight quarters of decline. The economy grew at a 33.1% rate in the July-September quarter after contracting at a 31.4% pace in the second quarter, the deepest since the government started keeping records in 1947.