By Mark Pender

NEW YORK (MNI) – The pace of U.S. industrial activity is strong but
is probably slowing based on Market News International’s capital goods
index, which recovered sharply to a 59.9 level that’s nevertheless one
of the lowest in four months, according to the results of MNI’s weekly
survey.

The four-week average fell more than two points to 58.1 for a fifth
straight decline. The 12-week average shows contrasting strength, at
66.5 and holding near the recovery best of 68.1 only five weeks ago.

There is a risk that the pre-announcement season is skewing the
four-week average lower compared to the 12-week average. Sample sizes
have been low, under 100 the past four periods.

Year-on-year sales, at +15.4%, are trending in the low to mid
double digits, held down by a slowly intensifying currency effect now at
-2%.

In contrast to the last couple of weeks, commentary is very
positive.

Richardson Electronics (RELL) reports growing demand for its
manufacturing services despite concern over the sustainability of the
recovery. Sales rates are strong but not accelerating while profit
margins are at record levels.

Sales and backlogs are accelerating strongly at CalAmp (CAMP),
which makes wireless communications products. The company reports rising
demand for products used in fleet tracking including school bus
tracking, which it lists as number one, and trailer tracking.

Rising rig counts are making for mid double-digit sales gains at
Flotek Industries (FTK). The downhole equipment maker reports sequential
sales improvement through each month of the third quarter.

Lighting maker Acuity Brands (AYI) said forecasts for flat to
slightly lower non-residential activity in the domestic market are an
improvement compared to the deep declines over the last several years.
They report growing interest in energy-saving renovation for commercial
and institutional buildings.

Most of the sales growth at Sono-Tek (SOTK.OB), which makes liquid
spray products for manufacturers, comes from green segments. Sales at
the company are accelerating sharply.

Robbins & Meyers (RBN), which makes pumps and mixers along with
other industrial products, said demand for capital goods in the North
American and European chemical markets is still weak, in contrast to
Asia where it’s strong.

Citing strains on hospital budgets and overall weakness in industry
demand, medical equipment maker Immocur (BLUD) cut guidance. Until now,
the company had not been affected by the economic slowdown.

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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