By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods index jumped 5.0 points
in the Jan. 27 period to 56.5, comfortably above breakeven 50 to
indicate solid growth in year-on-year business activity, according to
the results of Market News International’s weekly survey released
Monday.
Last week was the first heavy of week of the earnings season and,
as it often is, was filled with strong results from the strongest
companies of the sample’s universe.
Despite the strength, most trends in the sample continue to slope
downward including the 12-week average for the index which, at 56.4, is
at a 19-month low and points, like it did for the fourth quarter, to
deceleration for the first quarter.
Sales growth, at a year-on-year +5.5%, is up five tenths in the
week but still near a nine-month low.
Income for the sample jumped out of the negative column and, for
the first time in nearly two months, is in the positive column at +7.0%.
Sample size in the period is 338 companies.
For the last half year growth in the sample has been held down by
deep contraction in the electronics sector where, however, signs of life
are now reappearing.
Customers had been reducing inventories, but bookings began to pick
up in December at chip maker Maxim Integrated Products (MXIM) which sees
improving trends for the first quarter.
Chip-maker Micrel (MCRL) believes inventories are bottoming and are
now falling below demand which, together with stabilizing economic
conditions, point to a rebound in orders “sometime in February or
March.” Micrel sees a good chance that first-quarter year-on-year sales
will turn positive following double-digit contraction in the fourth
quarter.
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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