By Mark Pender

NEW YORK (MNI) – A very strong pre-announcement season is giving
MNI’s capital goods index a big lift, up 6.7 points in the April 16
period to 58.9 to indicate year-on-year growth for the U.S. industrial
sector and pointing to accelerating monthly and quarterly growth,
according to Market News International’s weekly survey.

Sample size at 96 is small, a factor that points for guidance to
the four-week average which is at 48.2. Sales are at a year-on-year
+6.5% with the four-week average at +0.1%. Income is at +41%.

The results point to significant strength for capital-goods
components in Friday’s durable goods report. Strength will likely be
centered once again in new orders with shipments still lagging.

Below is a run of commentary and detail.

Sequential sales growth is at +7% with year-on-year growth at
nearly +70% for power-chip maker Fairchild Semiconductor (FCS). The
company believes customer inventories are extremely low and reports
order rates were better than usual during the Asian holidays.

Microchip-packaging maker Kulicke & Soffa (KLIC) is reporting
fivefold year-on-year sales gains and sees fourfold sales gains for the
second quarter and similar gains for the third. It describes demand as
“unprecedented.”

Optical-products maker Oclaro (OCLR) pre-announced a 115%
year-on-year sales gain for its April 3rd quarter, ending a long string
of extremely weak results. The company reports strong demand, improving
order trends, and “crisp” operational execution.

Shock-absorber maker Taylor Devices (TAYD) reports year-on-year
sales gains in its construction market. It said aerospace and defense
sales remain strong.

Aerospace-parts maker Ladish (LDSH) reports strengthening in the
aerospace and industrial markets but no better than stabilization in the
jet-engine market. The company is keeping inventories down.

Fabrications maker Valmont Industries (VMI) warns its utility
customers have deferred some transmission projects originally planned
for this year into later years. It said sales of lighting and traffic
structures, which weakened sharply in the first quarter, are being hurt
by the inability of states to match funds for federally funded highway
projects. The company sees year-on-year declines extending into the
second quarter.

Schmitt Industries (SMIT) makes balancing systems for machine-tool
manufacturers and believes its sales levels, still declining though at a
slowing rate, are reflective of the manufacturing sector at the global
level. The company reports recovery in Asia-Pacific, especially in
China, while recovery in Europe and North America is slow and
inconsistent.

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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