By Mark Pender
NEW YORK (MNI) – MNI’s U.S. capital goods index rose more than
three points in the May 21 period to 59.4 indicating significant
acceleration in the industrial sector, according to the results of
Market News International’s weekly survey released Monday.
The four-week average is at 58.7 for a second week in a row. A
reading above 50 indicates year-on-year expansion in business activity.
Year-on-year sales for the period’s 450-company sample is +9.0% for
the strongest reading yet of the recovery. Income is at +32%.
The sample is pointing to big gains for capital-goods components of
the durable goods report for April due out Wednesday.
The rising dollar and the falling euro are growing topics of
concern in company statements. Currency effects have been adding low
single digits to year-on-year exports, but company guidance is more and
more pointing to a small negative effect beginning in the ongoing
quarter.
On the positive side, construction-equipment makers are reporting a
tangible pickup in residential demand, though non-residential
construction remains dormant.
The most striking feature of the capital-goods sector continues to
be the great surge underway in electronics machinery. Swings in this
group are exceptionally volatile with the ongoing surge matching the
severity of last year’s drop.
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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