By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods index slowed 1.4 points
in the March 9 period to 52.8, not much above breakeven 50 to indicate
no more than mild growth in year-on-year business activity, according to
the results of Market News International’s weekly survey released
Monday.
Sales are a year-on-year +4.7% for a two-month low. Income is a
recovery low of -9.0%. Sample size in the period is 319 companies.
Quarterly shipment growth for the government’s non-defense capital
goods component, based on this sample, is currently tracking at the
fourth quarter’s very thin rate of +0.3%.
Strength in the dollar is posing a risk to the sample’s
first-quarter growth. Foreign exchange is neutral right now, moving from
a small positive to what is likely a small negative effect on sales.
But there are plenty of positives in the sample including energy
equipment. Downhole equipment maker Flotek (FTK) reports an extension of
January’s strong double-digit growth through February and so far into
March. The company cites mild weather as a factor.
Aerospace is another central area of the sample’s strength. Work
transfers from over-worked suppliers should help aircraft-parts maker
LMI Aerospace (LMIA) post significant increases in sales and profits
this year. LMI is looking for acquisitions in the machinery,
engineering, and composites sectors.
Other commentary this week includes rising demand for buses from
Thor Industries (THOR) and expectations of contraction this year for
commercial carpets from carpet maker Dixie Group (DXYN).
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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