By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods indicator improved by 1.1
points in the Sept. 7 period to a 44.8 level that is still well below
50, indicating significant contraction in year-on-year business
activity, according to the results of MNI’s weekly survey released

Sales are +1.1% year-on-year with the foreign exchange effect on
export sales at -4%. Income is +4%. The period’s sample size is 291

Three-month averages, after more than a year of continual erosion,
are beginning to stabilize near current levels.

Backlogs are an important strength for MNI’s sample whose net
guidance points to no worse than modest sequential slowing for sales
growth in the third quarter.

Chief topics from the sample are recession in Europe and the risk
that slowing in China may prove more severe than expected.

Electronics industries, including machinery and telecom equipment,
look to subtract from third-quarter growth. The sample sees commercial
construction adding modestly to growth. Commentary on other industries
is mixed.

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 **