New factory orders and shipments of manufactured products declined slightly in April, the Commerce Department said yesterday.

The report was discouraging to those who were expecting steady growth in orders to fuel the expansion of the economy.

The biggest declines were in the auto industry, where shipments dropped by 8 per cent from March and new orders declined by 7 per cent.

In a separate report, Commerce said construction spending increased by 2.6 per cent in April to a seasonally adjusted annual rate of $163.4 billion from $159.3 billion in March, when it jumped 7 per cent.

Overall shipments of manufactured products dropped by 1 per cent, from $111.4 billion to $109.8 billion. The value of new orders declined by one-tenth of 1 per cent, from $111.9 billion in March to $111.8 billion in April.

The shipments decline resulted from a $2.2 billion, or 4 per cent, decrease in shipments of durable goods, which more than offset a $700 million increase - 1 per cent - in non-durable goods shipments.

Inventories held by manufacturers rose by 1 per cent - $1.6 billion - to $171 billion.

Commerce Department economists noted that the new orders, though changing little in April, were up 12 per cent from April 1976, when they were $98.7 billion. They said they were encouraged by a steady increase in nondefense capital goods orders.