By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index firmed seven tenths
in the Feb. 17 period to 58.5, well over breakeven 50 to indicate solid
growth in year-on-year business activity, according to the results of
Market News International’s weekly survey released Tuesday.

Guidance has been improving week-to-week over the past month with
the sample now indicating a modest rate of quarterly growth in line with
the growth rate of the fourth quarter.

Sales are a year-on-year +6.0% for the best reading in more than
two months. Currency translation is having no year-on-year effect on
sales though the quarterly effect is slightly negative.

Income growth is steady for a third week at a year-on-year 8%.
Sample size in the latest period is 531 companies.

Crane & lift maker Terex (TEX) reports “good” rates of machinery
replacement among European rental companies though the rates are still
slower than in North America where growth right now is particularly
strong.

Mine Safety Applications (MSA) has an uneven outlook, optimistic
for strengthening demand in the U.S. and emerging markets but warning of
uncertain conditions for Europe.

Horsehead (zinc) says domestic steel production so far this quarter
is “much stronger” following the fourth quarter’s slowdown. The company
is operating at full capacity.

Intrepid Potash (IPI) is upbeat, citing strong estimates this year
for corn acreage and reporting an ongoing increase in demand ahead of
the spring application season. On the industrial side, the company
reports good demand tied to rising rig counts and expanding fracture
activity.

Increased use of natural gas at utilities is cutting into coal
demand reports railcar maker FreightCar America (RAIL) which
nevertheless is optimistic that the ongoing replacement cycle for coal
cars will continue.

The outlook is mixed from domestic aggregates producer Vulcan
Materials (VMC) which sees public spending on highway projects holding
no better than steady this year, some improvement in private
nonresidential construction, and continued strong growth in multi-family
housing.

Powerwave Technologies (PWAV), which makes wireless infrastructure
equipment, is downsizing, saying the global economy is causing operators
to reduce or postpone business investment.

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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