By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods index continues to slow
with a one tenth slip in the Dec. 23 period to 54.1, still above 50 to
indicate growth in year-on-year business conditions, according to the
results of Market News International’s weekly survey released Tuesday.
December is often a very big month for the capital goods sector,
especially for shipments. But commentary so far this month is less
optimistic than usual at this time of year and is increasingly pointing
to a slowing for future business conditions.
Sequentially, MNI’s data point to a slowdown for shipments which in
last week’s durable goods report show wide softening in November. If
December proves no better than November, nondefense capital goods
shipments for the fourth quarter would actually contract, to a quarterly
-0.5%. Quarterly year-on-year growth would slow to +8.1% vs. the third
quarter’s +9.5%.
Sales growth in MNI’s sample, at a year-on-year +5.6%, is trending
at its slowest rate since second-quarter last year. Income, at a
year-on-year -1.0%, is contracting for the first time since the
first-quarter last year. Sample size in the period is 243 companies.
Europe is a deepening concern for the sample including for
hydraulics & electrical products maker Actuant (ATU) which sees growth
slowing roughly in half during its February quarter to the low double
digits: “The current economic environment creates uncertainty for
Actuant and its customers. Therefore, despite the robust year-over-year
growth we have enjoyed over the past quarters, we anticipate that
economic conditions in some of our served geographies, most notably
Europe, could provide for more challenging business conditions going
forward.”
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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