By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index is little changed
in the Aug. 5 period at 76.0, well over 50 to indicate very strong
growth in year-on-year business conditions, according to the results of
Market News International’s weekly survey released Monday.

But details show less strength than the assessment of business
conditions. Sales are unchanged at a year-on-year +13.0% with the
four-week average, at +13.2%, down for a fifth week in a row and the
12-week average down for a seventh week in a row at +14.0%.

Currency is a major plus for the sample, adding a year-on-year 5%
to export sales. The government will post the international trade report
on Thursday with the capital goods component likely to show a lift in
June.

Income for the sample is near a nine-month low at +15%. A large
increase in the size of the sample size, at 523 in the latest period vs.
393 in the prior period, had very little effect on any of the readings.

Robust is how Hardinge (HDNG) describes order and sales trends and
stresses that its global activity is strengthening. The metal-cutting
tool maker suspects that customers are buying now in anticipation that
future prices are likely to rise and that lead times will lengthen.

Dynamic Materials (BOOM), which makes explosive metalworking
products, reports encouraging signs in several of its industrial markets
that point to rising momentum in capital spending. The company raised
guidance calling for 2011 midpoint sales growth of 26%.

Production is increasing at ball-bearing maker RBC Bearings (ROLL)
which reports continued strong demand in its industrial markets and
building momentum in its aerospace market.

Titanium products maker RTI International (RTI) reports
strengthening demand from traditional customers following the Paris Air
Show. New customers in engine manufacturing also came forward at the
show.

Citing improving demand from marine and industrial markets and
continued strong demand for oil & gas transmission, Twin Disc (TWIN),
which makes power transmission products, sees continuing sales growth in
the quarters ahead.

Pent-up demand tied to aging fleets is what mower & excavator maker
Alamo (ALG) believes is giving its industrial unit a lift.
Second-quarter sales for this unit rose a year-on-year 20% despite
spending constraints on its customers in the government sector.

LB Foster (FSTR), which makes railroad ties and tubular products,
warns that lack of progress on new transportation legislation and what
it describes as steadily decreasing government spending on
infrastructure are negative headwinds in its construction and transit
markets.

Editor’s Note: MNI compiles its capital goods index based on a
weekly sample of company news and data.

** Market News International New York Newsroom: 212-669-6430 **

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