By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods indicator fell 1.2 points
in the Oct. 26 period to 43.6 and is further below 50 to indicate
sizable contraction in year-on-year business activity, according to the
results of MNI’s weekly survey released Monday.
Year-on-year sales growth is zero which is the lowest reading in
2-1/2 years.
MNI’s sales reading excludes distortions from acquisitions but
includes effects from foreign exchange which are shaving three
percentage points from export sales.
Year-on-year income growth, like sales growth, is at zero.
Sequentially, guidance from MNI’s sample is also pointing to zero
growth.
More zeros are coming from the ex-aircraft sample where both
year-on-year sales growth and sequential sales growth are at zero.
Year-on-year income growth from the ex-aircraft group is also at zero.
Less downbeat than the numbers is the sample’s commentary which is
no worse than mixed.
Those in the positive camp are pointing to strength in bookings and
booking activity. Some in this group are pointing to resilient strength
in Europe.
Those on the negative side say customers are reluctant to make
decisions because of macro-economic uncertainty that includes the
year-end U.S. fiscal cliff.
There are also repeated comments on inventory reductions.
Semiconductors and telecom infrastructure are key areas of weakness.
Early warnings are also popping up about negative sequential events
tied to weather.
Sample size in the period is 365 companies.
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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