By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods indicator reversed the
prior week’s dip with a 1.8 gain in the Oct. 19 period to 44.8 which is
still, however, well below 50 to indicate sizable contraction in
year-on-year business activity, according to the results of MNI’s weekly
survey released Monday.
Sales are +0.8% year-on-year. This excludes distortions from
acquisitions but includes effects from foreign exchange where pressures
are easing a bit, now shaving three percentage points from export sales
which is down from four percentage points.
Year-on-year income growth for the sample is zero. The period’s
sample size is 291 companies.
Results so far for the September quarter point to no change in
sales from the June quarter. For the December quarter, guidance from the
sample is calling for a low single digit gain.
The numbers, however, are proving better than the commentary which
for the most part is increasingly downbeat.
Some are relying on cost cutting to make profit targets and some
seem poised to announce layoffs. Reports out of chip equipment and
industrial computers point to continued contraction.
Yet for most industries the sample reports still solid conditions
including for agriculture, autos, chemicals, energy, and general
industrial.
Many also cite strength in aerospace. But for MNI’s sample, there’s
very little change with or without aircraft. The sample’s ex-aircraft
index, based on 281 non-aircraft companies in the latest period, is 44.1
with sales and income matching the entire sample at +0.8% and zero.
When excluding suppliers to aerospace, the results are nearly the
same with this 172 company sample showing a 44.8 index reading and +1.8%
for sales and +2% for income.
By regions, comments on Europe are uniformly negative while concern
over slowing in China appears to be easing a bit.
Editor’s Note: MNI compiles its capital goods indicator based on a
weekly sample of company news and data.
** MNI New York Bureau: 212-669-6430 **
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